Doctrine of Compassionate Justice

ALMIRA vs B.F. GOODRICH, GR No. L-34974, July 25, 1974

157 Phil. 110

FERNANDO, J.:

What is readily apparent in this appeal from a decision of respondent Court of Industrial Relations, declaring a strike
illegal because of the means employed, and dismissing petitioners, was the high pitch of bitterness that marked the relationship
between labor and management in the establishment of private respondent, B. K Goodrich Philippines, Inc. Kven a cursory
reading of the' records will make evident that on both sides, there was the feeling that the other party was guilty of conduct the
most reprehensible: resulting in the flagrant disregard of its rights. With such a background, there was a greater need for
objectivity in the application of the authoritative legal norms to the facts as found.: It cannot be said that respondent Court, more
precisely respondent Joaquin Salvador, then the Judge whose order is now on appeal, was fully cognizant that such should be the
case.[1] It is hard not to lend credence to the contention of petitioners that there was undue receptivity to the claim of private
respondent, no doubt induced by the skill, competence, and resourcefulness of its counsel, Atty. Manuel Chan. It was
unfortunate that in some of the crucial stages of the controversy, petitioners did not have the same advantage.[2] Nonetheless, as
will be shown, the strike could have been viewed with a little less disapproval and even if declared illegal, need not have been
attended with such a drastic consequence as termination of employment relationship. This last point is even more compelling
considering the security of tenure which is one of the notable features in the present Constitution.[3]

The facts according to the appealed order follow: "As to the conduct of the strike and the picketing, this Court's Order of
July 1, 1971 has fully described the same, In the course of the mass picketing, illegal and unlawful acts were committed by the
respondents such as physically blocking and preventing the entry of complainant's customers, supplies and other employees who
were not on strike, bom in complainant's premises in Makati and Marikina, Rizal. Injuries likewise were inflicted on certain
employees of complainant. Such acts of violence and intimidation appear to be of such a widespread nature so as to create an
impression that there is a common pattern of action set into motion by the respondents. The actuations of respondents are
likewise illegal. In the premises of complainant at Makati, Rizal, the respondents who picketed the same on April 20, 1971 were
identified * * *. Similarly, some of the respondents who picketed the Marikina premises of complainants were identified * *
*.[4] Further: "The complainant caused the publication of notices in both the Manila Times and Daily Mirror, newspapers of
general and wide circulation * * * for all employees not participating in the illegal strike to report for work on or before April 23,
1971, otherwise such failure will be considered as participation therein. Such notices were accompanied by instructions to
personnel at all levels on how reporting for work will be accomplished, considering the precarious situation in relation to the
safety of employees brought about by the strike of respondents. With respect to this particular aspect, certain of the respondents
who were not seen in the picket line on or before April 23, 1971 were identified as having failed to report for work * * *. It would
appear, however, that these listed respondents who failed to report for work likewise were seen picketing the premises of
complainant after April 26, 1971, * * *."[5] Then came this portion: "It would seem that the picketing by respondents has
continued up [to] the present, under the same pattern of coercive activities narrated in our Order of July 1, 1971. Physical injuries
were inflicted on complainant's personnel manager. Mass picketing with the employment of intimidatory statements have again
started on January 3, 1972. The roof of the complainant's Makati Recap Plant was set on fire on January 13, 1972* * *."[6]

Based on the above facts, it was held in the appealed order of Judge Salvador: "On the basis, therefore, of the motivation
as well as the conduct of the strike, the respondents are declared to have committed an illegal strike, which is likewise an unfair
labor practice."[7] As a consequence, in the dispositive portion, petitioners were "declared to have lost their status of employees
of the complainant corporation as of April 19, 1971,"[8] The appealed order was handed down on February 4, 1972. Had a greater
awareness been displayed to the approach followed by this Court in a 1968 decision, Cebu Portland Cement Co. v. Cement
Workers Union,[9] as well as to Shell Oil Workers' Union v. Shell Co. of the Philippines, Ltd.,[10] there could have been less
certitude displayed in the opinion of Judge Salvador as to the correctness of its decision. Moreover, as stated at the outset, if
there be deference to what of late has been so evident, even on the assumption of the illegality of the strike, there need not be the
automatic termination of the employment relationship, especially so in view of the command of the present Constitution as to
the security of tenure.

1. It is understandable why respondent Judge Salvador was unsympathetic to a strike in which petitioners participated,
considering the pendency of a certification election, just because management would not consider their union as the exclusive
collective bargaining representative. At the very least, it was premature. Nonetheless, there was this commendable admission in
the appealed order of Judge Salvador: "Lest we be misconstrued, the illegality of a strike for recognition as a general proposition
is not absolute. We declare such strike illegal on the basis of the attendant circumstances in this case."[11] It mentioned the
attendant circumstances, but as was apparent in an earlier portion of such order, what respondent Judge apparently could not
resist was the compelling force of what by now should be an outmoded view of a strike being "by its very nature * * * coercive * *
*."[12] To display such a predisposition is to ignore the leading case of Cebu Portland Cement Co. v. Cement Workers
Union.[13] For, as was therein pointed out, the ruling in National Labor Union, Inc. V. Philippine Match Factor[14] to the effect
that a strike "is an economic weapon at war with the policy of the Constitution and the law," resort to which "is not, in plain
terms, outlawed,"[15] although certainly discouraged, is obsolete, for as was so clearly pointed out by Justice J. B. L. Reyes
in Cebu Portland Cement Co. v. Cement Workers Union:[16] "For a time, decisions on the issue under consideration were
characterized by strict adherence to the ruling in the Philippine Match Factory Case."[17] Further, it was stated by him: "The
actual break-away from the doctrine laid down in the Philippine Match Factory case came in Dinglasan v. National Labor
Union, when the discretionary power of the Court of Industrial Relations to grant affirmative relief was recognized.

* * * Thereafter, the doctrine enunciated in Interwood Employees Association, * * * that good faith of the strikers in the staging
of the strike is immaterial in the determination of the legality or illegality of the strike, was abandoned. In the case of Ferrer v.
CIR, et al. the belief of the strikers that the management was committing unfair labor practice was properly considered in
declaring an otherwise premature strike, not unlawful, and in affirming the order of the Labor Court for the reinstatement
without back wages of said employees."[18] This 1968 decision of this Court, if present in the consciousness of respondent Judge
Salvador, certainly could have caused, at the very least, a hesitancy on his part to declare the strike illegal. This is not to deny that
the labor union ought not to have declared a strike under such circumstances, but at least, while premature, it could have been
plausibly viewed as inspired by good faith, although perhaps not guided by sound legal advice.

2. What was set forth in the facts as found by respondent Judge Salvador would indicate that it was during the picketing,
certainly not peaceful, that the imputed acts of violence did occur. It cannot be ignored, however, that there were injuries on both
sides because management did not, understandably, play a passive role confronted as it was with the unruly disruptive tactics of
labor. This is not, by any means, to condone activities of such character, irrespective of the parties responsible. It is merely to
explain what cannot be justified. Nonetheless, did the acts in question call for an automatic finding of illegality? Again, the order
issued on February 4, 1972 appeared to be oblivious of a 1971 decision of this Court, Shell Oil Workers' Union v. Shell Company
of the Philippines, Ltd.[19] There it was clearly held: "A strike otherwise valid, if violent in character, may be placed beyond the
pale. Care is to be taken, however, especially where an unfair labor practice is involved, to avoid stamping it with illegality just
because it is tainted by such acts. To avoid rendering illusory the recognition of the right to strike, responsibility in such a case
should be individual and not collective. A different conclusion would be called for, of course, if the existence of force while the
strike lasts is pervasive and widespread, consistently and deliberately resorted to as a matter of policy. It could be reasonably
concluded then that even if justified as to ends, it becomes illegal because of the means employed."[20] It must be pointed out
likewise that the facts as there found would seem to indicate a greater degree of violence. Thus: "Respondent Court must have
been unduly impressed by the evidence submitted by the Shell Company to the effect that the strike was marred by acts of force,
intimidation and violence on the evening of June 14 and twice in the mornings of June 15 and 16, 1967 in Manila. Attention was
likewise called to the fact that even on the following day, with police officials stationed at the strike-bound area, molotov bombs
did explode and the streets were obstructed with wooden planks containing protruding nails. Moreover, in the branches of the
Shell Company in Iloilo City as well as in Bacolod, on dates unspecified, physical injuries appeared to have been inflicted on
management personnel. Respondent Court in the appealed decision did penalize with loss of employment the ten individuals
responsible for such acts. Nor is it to be lost sight of that before the certification on June 27, 1967, one month had elapsed during
which the Union was on strike. Except on those few days specified then, the Shell Company could not allege that the strike was
conducted in a manner other than peaceful. Under the circumstances, it would be going too far to consider that it thereby
became illegal."[21] Then, mention was made of a decision "in Insular Life Assurance Co., Ltd. Employees' Association v. Insular
Life Assurance Co., Ltd. [where] there is the recognition by this Court, speaking through Justice Castro, of picketing as such
being 'inherently explosive.' It is thus clear that not every form of violence suffices to affix the seal of illegality on a strike or to
cause the loss of employment by the guilty party."[22]

There was in that case a concurring opinion by Justice Barredo which elicited the approval of the present Chief Justice. Thus:
"All these, however, do not mean, on the other hand, that petitioner's strike should necessarily be held to be illegal. It is always a
wholesome attitude in cases of this nature to give but secondary importance to strict technicalities, whether of substantive or
remedial law, and to constantly bear in mind the human values involved which are beyond pecuniary estimation."[23]

It would seem, therefore, to reiterate a point, that on the date of the appealed order of February 4, 1972, a less condemnatory
attitude to the appearance of violence as such was part of the law of the land. It is to be admitted that this is one of those close
cases. What is merely emphasized is that the imputation of illegality on the ground of the means employed is not automatically
called for.

3. This is not to say that the appealed order is totally bereft of support in law. It is merely to point out that the facts as found did
not point automatically and unerringly to so severe a result, namely the dismissal of petitioners. From a perspective more
attuned to the trend indicated in current decisions of this Court, the three cited cases being representative, the conclusion
reached could have been cast in a different mold. In labor law, as in constitutional law, it is no doubt true that the issues
submitted, in the language of Justice Malcolm, may be "determined by the court's approach to them."[24] It is submitted that the
direction indicated in the express language of both the 1935 and the present Constitution, is that which leads to protection to
labor.[25]

As previously noted, both petitioners and private respondent were guilty of practices far from peaceful in character. The original
blame must of course be assumed by petitioners, for they ought to have known that the picketing that comes within the
protection of the free speech guarantee is one that is peaceful. It involves people marching to and fro with placards to acquaint
the public with the facts of a labor dispute. So it has been ruled from Mortera v. Court of Industrial Relations,[26] a 1947
decision, to Chan Bros., Inc. v. Federation Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinos,[27] decided in
January of this year. When they obstructed entrance into the premises of private respondent, they ought to have known that they
were inviting reprisal. It has been observed of course that in labor controversies the unstructured incoherences of vehement
protest for grievances, sincerely even if erroneously felt, may easily flare up into rowdy conduct. So it did come about. The
appealed order took note of the resulting melee. From the standpoint of settling a dispute, it would not suffice just to visit
recriminations on either or both parties. The more crucial question is what to do next.
We start with the circumstances that ought to be considered. To repeat, the breach of the peace, though started by petitioners,
was not solely their responsibility as it turned out. For criminal charges and countercharges were filed by one group against the
other. The reply brief of private respondent, submitted on March 8, 1973, included a memorandum from a certain Attorney
Rolando A. Velasco, speaking of the status of the criminal cases filed by the group of petitioners against management
men,[28] and of thirteen criminal cases as well as complaints against at least thirty individuals identified with private
respondent.[29] In some of them the complainants did not press charges, and the cases were dismissed. With the submission of
such data, its objection to the admission of information similar in character as to the status of the criminal cases against
petitioners loses weight. What is more, it does not appear as of this date as to who of the petitioners were found guilty of what
was referred to it in the Shell opinion as committing serious acts of violence. As a matter of fact, the appealed order merely
referred to the instances of picketing conducted illegally without specifically pin-pointing the culprits to whom such kind of
conduct could be ascribed. It would seem therefore, that the wholesale dismissal of petitioners is far from warranted. It is to be
admitted though that on a showing of having engaged in non-peaceful activities of a serious character, the right to readmission is
defeated.

This conclusion is further fortified by the stress on the security of tenure that is a notable feature of the present
Constitution. As pointed out in a decision rendered only last month, Philippine Airlines, Inc. v. Philippine Air Lines Employees
Association:[30] "The futility of this appeal becomes even more apparent considering the express provision in the Constitution
already noted, requiring the State to assure workers 'security of tenure.' It was not that specific in the 1935 Charter. The mandate
was limited to the State affording 'protection to labor, especially to working women and minors, ***.'*** That is to conform to
the ideal of the New Society, the establishment of which was to felicitously referred to by the First Lady as the Compassionate
Society."31 To the possible objection that in this Philippine Air Lines case, there was an order of reinstatement, it suffices by way
of an answer that while the facts could be distinguished, the basic principle in accordance with a constitutional mandate, in the
language of Justice Cardozo, speaks with "a reverberating clang that drowns all weaker sounds."

It would imply at the very least that where a penalty less punitive would suffice, whatever missteps may be committed by labor
ought not to be visited with a consequence so severe. It is not only because of the law's concern for the workingman. There is, in
addition, his family to consider. Unemployment brings untold hardships and sorrows on those dependent on the wage-earner.
The misery and pain attendant on the loss of jobs then could be avoided if there be acceptance of the view that under all the
circumstances of this case, petitioners should not be deprived of their means of livelihood. Nor is this to condone what had been
done by them. For all this while, since private respondent considered them separated from the service, they had not been paid.
From the strictly juridical standpoint, it cannot he too strongly stressed, to follow Davis in his masterly work, Discretionary
Justice,[32] that where a decision may be made to rest an informed judgment rather than rigid rules, all the equities of the case
must be accorded their due weight. Finally, labor law determinations, to quote from Bultmann, should be not only secundum
mtionem but also secundum caritatem.

4. This is all that needs to be said except to remind petitioners that the basic doctrine underlying the provisions of the
Constitution so solicitous of labor as well as the applicable statutory norms is that both the working force and management are
necessary components of the economy. The rights of labor have been expanded. Concern is evident for its welfare. The
advantages thus conferred, however, call for attendant responsibilities. The ways of the law are not to be ignored. Those who
seek comfort from the shelter that it affords should be the last to engage in activities which negate the very concept of a legal
order as antithetical to force and coercion. What is equally important is that in the steps to be taken by it in the pursuit of what it
believes to be its rights, the advice of those conversant with the requirements of legal norms should be sought and should not be
ignored. It is even more important that reason and not violence should be its milieu.
WHEREFORE, the appealed order of February 4, 1972 as affirmed in a resolution of March 14, 1972 is reversed and set aside.
Petitioners against whom no criminal charges filed in relation to their acts referred to in this decision are still pending are
ordered reinstated to their employment, with the right to backpay corresponding to eighteen (18) months, at the respective rates
of compensation they were being paid on February 4, 1972, without any deduction corresponding to any possible income earned
elsewhere since their dismissal to the present. Those petitioners against whom criminal complaints have been filed shall be
reinstated, with the right to backpay as herein indicated, only upon the final dismissal of said cases or their acquittal therein.
Respondent Court is hereby ordered to implement this decision as expeditiously as possible. No costs.
PLDT vs NLRC, GR No. 80609, August 23, 1988
DECISION
CRUZ, J.:
The only issue presented in the case at bar is the legality of the award of financial assistance to an employee who had been
dismissed for cause as found by the public respondent.
Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by two complainants of
having demanded and received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval
of their applications for telephone installation.[1] Investigated and heard, she was found guilty as charged and accordingly
separated from the service.[2] She went to the Ministry of Labor and Employment claiming she had been illegally removed. After
consideration of the evidence and arguments of the parties, the company was sustained and the complaint was dismissed for lack
of merit. Nevertheless, the dispositive portion of the labor arbiter's decision declared:

"WHEREFORE, the instant complaint is dismissed for lack of merit.

"Considering that Dr. Helen Bangayan and Mrs. Consolacion Martinez are not totally blameless in the light of the fact that the
deal happened outside the premises of respondent company and that their act of giving P3,800.00 without any receipt is
tantamount to corruption of public officers, complainant must be given one month pay for every year of service as financial
assistance."[3]

Both the petitioner and the private respondent appealed to the National Labor Relations Board, which upheld the said
decision in toto and dismissed the appeals.[4] The private respondent took no further action, thereby impliedly accepting the
validity of her dismissal. The petitioner, however, is now before us to question the affirmance of the above-quoted award as
having been made with grave abuse of discretion.
In its challenged resolution of September 22, 1987, the NLRC said:

"x x x Anent the award of separation pay as financial assistance in complainant's favor, We find the same to be equitable, taking
into consideration her long years of service to the company whereby she had undoubtedly contributed to the success of
respondent. While we do not in any way approve of complainant's (private respondent) malfeasance, for which she is to suffer
the penalty of dismissal, it is for reasons of equity and compassion that we resolve to uphold the award of financial assistance in
her favor." [5]

The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is entitled to
reinstatement and backwages as required by the labor laws. However, an employee dismissed for cause is entitled to neither
reinstatement nor backwages and is not allowed any relief at all because his dismissal is in accordance with law. In the case of
the private respondent, she has been awarded financial assistance equivalent to ten months pay corresponding to her 10-year
service in the company despite her removal for cause. She is, therefore, in effect rewarded rather than punished for her
dishonesty, and without any legal authorization or justification. The award is made on the ground of equity and compassion,
which cannot be a substitute for law. Moreover, such award puts a premium on dishonesty and encourages instead of deterring
corruption.

For its part, the public respondent claims that the employee is sufficiently punished with her dismissal. The grant of
financial assistance is not intended as a reward for her offense but merely to help her for the loss of her employment after
working faithfully with the company for ten years. In support of this position, the Solicitor General cites the cases of Firestone
Tire and Rubber Company of the Philippines v. Lariosa[6] and Soco v. Mercantile Corporation of Davao,[7] where the employees
were dismissed for cause but were nevertheless allowed separation pay on grounds of social and compassionate justice. As the
Court put it in the Firestone case:

"In view of the foregoing, We rule that Firestone had valid grounds to dispense with the services of Lariosa and that the NLRC
acted with grave abuse of discretion in ordering his reinstatement. However, considering that Lariosa had worked with the
company for eleven years with no known previous bad record, the ends of social and compassionate justice would be served if he
is paid full separation pay but not reinstatement without backwages by the NLRC."
In the said case, the employee was validly dismissed for theft but the NLRC nevertheless awarded him full separation pay for his
11 years of service with the company. In Soco, the employee was also legally separated for unauthorized use of a company vehicle
and refusal to attend the grievance proceedings but he was just the same granted one-half month separation pay for every year of
his 18-year service.

Similar action was taken in Filipro, Inc. v. NLRC,[8] where the employee was validly dismissed for preferring certain
dealers in violation of company policy but was allowed separation pay for his 2 years of service. In Metro Drug Corporation v.
NLRC,[9] the employee was validly removed for loss of confidence because of her failure to account for certain funds but she was
awarded separation pay equivalent to one-half month's salary for every year of her service of 15 years. In Engineering
Equipment, Inc. v. NLRC,[10] the dismissal of the employee was justified because he had instigated labor unrest among the
workers and had serious differences with them, among other grounds, but he was still granted three months separation pay
corresponding to his 3-year service. In New Frontier Mines, Inc. v. NLRC,[11] the employee's 3-year service was held validly
terminated for lack of confidence and abandonment of work but he was nonetheless granted three months separation pay. And
in San Miguel Corporation v. Deputy Minister of Labor and Employment, et al.,[12] full separation pay for 6, 10, and 16 years
service, respectively, was also allowed three employees who had been dismissed after they were found guilty of misappropriating
company funds.

The rule embodied in the Labor Code is that a person dismissed for cause as defined therein is not entitled to separation
pay.[13] The cases above cited constitute the exception, based upon considerations of equity. Equity has been defined as justice
outside law,[14] being ethical rather than jural and belonging to the sphere of morals than of law.[15] It is grounded on the precepts
of conscience and not on any sanction of positive law.[16] Hence, it cannot prevail against the expressed provision of the labor
laws allowing dismissal of employees for cause and without any provision for separation pay.

Strictly speaking, however, it is not correct to say that there is no express justification for the grant of separation pay to
lawfully dismissed employees other than the abstract consideration of equity. The reason is that our Constitution is replete with
positive commands for the promotion of social justice, and particularly the protection of the rights of the workers. The
enhancement of their welfare is one of the primary concerns of the present charter. In fact, instead of confining itself to the
general commitment to the cause of labor in Article II on the Declaration of Principles of State Policies, the new Constitution
contains a separate article devoted to the promotion of social justice and human rights with a separate sub-topic for labor. Article
XIII expressly recognizes the vital role of labor, hand in hand with management, in the advancement of the national economy
and the welfare of the people in general. The categorical mandates in the Constitution for the improvement of the lot of the
workers are more than sufficient basis to justify the award of separation pay in proper cases even if the dismissal be for cause.

The Court notes, however, that where the exception has been applied, the decisions have not been consistent as to the
justification for the grant of separation pay and the amount or rate of such award. Thus, the employees dismissed for theft in
the Firestone case and for animosities with fellow workers in the Engineering Equipment case were both awarded separation pay
notwithstanding that the first cause was certainly more serious than the second. No less curiously, the employee in the Soco case
was allowed only one-half month pay for every year of his 18 years of service, but in Filipro the award was two months separation
pay for 2 years service. In Firestone, the employee was allowed full separation pay corresponding to his 11 years of service, but in
Metro, the employee was granted only one-half month separation pay for every year of her 15-year service. It would seem then
that length of service is not necessarily a criterion for the grant of separation pay and neither apparently is the reason for the
dismissal.

The Court feels that distinctions are in order. We note that heretofore the separation pay, when it was considered
warranted, was required regardless of the nature or degree of the ground proved, be it mere inefficiency or something graver like
immorality or dishonesty. The benediction of compassion was made to cover a multitude of sins, as it were, and to justify the
helping hand to the validly dismissed employee whatever the reason for his dismissal. This policy should be re-examined. It is
time we rationalized the exception, to make it fair to both labor and management, especially to labor.

There should be no question that where it comes to such valid but not iniquitous causes as failure to comply with work
standards, the grant of separation pay to the dismissed employee may be both just and compassionate, particularly if he has
worked for some time with the company. For example, a subordinate who has irreconcilable policy or personal differences with
his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. A working mother who
has to be frequently absent because she has also to take care of her child may also be removed because of her poor attendance,
this being another authorized ground. It is not the employee's fault if he does not have the necessary aptitude for his work but on
the other hand the company cannot be required to maintain him just the same at the expense of the efficiency of its operations.
He too may be validly replaced. Under these and similar circumstances, however, the award to the employee of separation pay
would be sustainable under the social justice policy even if the separation is for cause.

But where the cause of the separation is more serious than mere inefficiency, the generosity of the law must be more
discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his
quota but surely he does not deserve such generosity if his offense is misappropriation of the receipts of his sales. This is no
longer mere incompetence but clear dishonesty. A security guard found sleeping on the job is doubtless subject to dismissal but
may be allowed separation pay since his conduct, while inept, is not depraved. But if he was in fact not really sleeping but
sleeping with a prostitute during his tour of duty and in the company premises, the situation is changed completely. This is not
only inefficiency but immorality and the grant of separation pay would be entirely unjustified.

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the
reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit
sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the ground of social justice.

A contrary rule would, as the petitioner correctly argues, have the effect of rewarding rather than punishing the erring
employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has nothing
to do with the wrong he has committed. Of course it has. Indeed, if the employee who steals from the company is granted
separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next employment
because he thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is not going to do
labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the protection and concern
of the Constitution.
 The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the
underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an
imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice
cannot be permitted to be the refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty.
Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they
happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not
worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character.

Applying the above considerations, we hold that the grant of separation pay in the case at bar is unjustified. The private
respondent has been dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has
impliedly admitted. The fact that she has worked with the PLDT for more than a decade, if it is to be considered at all, should be
taken against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of betraying during all of
her 10 years of service with the company. If regarded as a justification for moderating the penalty of dismissal, it will actually
become a prize for disloyalty, perverting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of
all undesirables.
The Court also rules that the separation pay, if found due under the circumstances of each case, should be computed at
the rate of one month salary for every year of service, assuming the length of such service is deemed material. This is without
prejudice to the application of special agreements between the employer and the employee stipulating a higher rate of
computation and providing for more benefits to the discharged employee. [17]

WHEREFORE, the petition is GRANTED. The challenged resolution of September 22, 1987, is AFFIRMED in toto except for
the grant of separation pay in the form of financial assistance, which is hereby DISALLOWED. The temporary restraining order
dated March 23, 1988, is LIFTED. It is so ordered.
SOLIDBANK CORPORATION vs NLRC, GR No. 165951, March 30, 2010

DECISION

PERALTA, J.:

Before this Court is a Petition for Review on certiorari,[1] under Rule 45 of the Rules of Court, seeking to set aside the May 28,
2004 Decision[2] and October 28, 2004 Resolution[3] of the Court of Appeals (CA), in CA-G.R. SP No. 76879. The CA awarded
financial assistance to respondents Rodolfo Bombita et al. out of compassionate justice despite the fact that petitioner Solidbank
Corporation had already paid the respondents their separation pay in accordance with Article 283 of the Labor Code.

The facts of the case are as follows:

Sometime in May 2000, petitioner decided to cease its commercial banking operations and forthwith surrendered to the Bangko
Central ng Pilipinas its expanded banking license. As a result of petitioners decision to cease its operations, 1,867 of its
employees would be terminated.

On July 25, 2000, petitioner sent individual letters to its employees, including respondents, advising them of its decision to
cease operations and informing them that their employment would be terminated. The pertinent portions of said letter are
hereunder reproduced, to wit:

With the cessation of the banking operations of Solidbank Corporation and the surrender of its
banking license to the Bangko Sentral ng Pilipinas (BSP), the employment of all Solidbankers will have to be
terminated.

We regret that your services as an employee of Solidbank are hereby terminated, effective the close of
business hours on 31 August 2000. Your separation package will be in accordance with the implementing
guidelines issued to all officers and staff in President/CEO D.N. Vistans Memorandum of 14 July 2000. You
will receive your separation pay only upon release of your clearance, but not later than the effectivity date of
your termination from the Bank.

We wish you success in your future endeavors.[4]

On July 31, 2000, petitioner sent to the Department of Labor and Employment a letter[5] dated July 28, 2000, informing said
office of the termination of its employees, the pertinent portions of which read:

In compliance with the provisions of Article 283 of the Labor Code, we would like to inform the Department of
Labor and Employment that Solidbank Corporation will cease operations and surrender its banking license to
the Bangko Sentral ng Pilipinas effective 31 August 2000.

Due to the cessation of the Banks operations, the employment of all officers and staff of Solidbank will be
terminated effective the close of business hours on 31 August 2000. As a result, the Bank will implement a
 separation program in accordance with the attached guidelines. The separation package offered to
Solidbankers is more than what is required by law.[6]

Petitioner granted to its employees separation pay equivalent to 150% of gross monthly pay per year of service, and cash
equivalent of earned and accrued vacation and sick leaves as a result of their dismissal. Upon receipt of their separation pay, the
employees of petitioner, including respondents, individually signed a Release, Waiver, and Quitclaim.[7]

On September 27, 2000, respondents filed with the Labor Arbiter (LA) complaints for illegal dismissal, underpayment of
separation pay, plus damages and attorneys fees, and these were docketed as NLRC NCR Case Nos. 30-09-03843-00, 30-
1004350-00, 30-10-03928-00, 30-10-04200-00, and 30-10-04036-00.

On July 22, 2002, the LA rendered a Decision[8] ruling that respondents were validly terminated from employment as a result of
petitioners decision to cease its banking operations. The LA, however, inspired by compassionate justice, awarded financial
assistance of one months salary to respondents. The dispositive portion of the Decision reads:

WHEREFORE, the Complaints for illegal dismissal filed by the complainants under the above-stated
case numbers are hereby dismissed for lack of merit. However, inspired by compassionate justice, this
Office hereby orders the respondent Solidbank Corporation to provide each complainant a
financial assistance of one months salary.

Metrobanks motion to dismiss the claim against it for want of jurisdiction is DENIED for lack of merit.

Complainants motion to admit annexes dated March 12, 2001, together with their motions to amend
affidavits/complaints dated January 22, 2001 are hereby GRANTED for being meritorious.
Solidbanks counterclaim is dismissed for lack of merit.
SO ORDERED.[9]

Both parties appealed the LAs Decision to the National Labor Relations Commission (NLRC).

On October 29, 2002, the NLRC rendered a Decision[10] affirming the findings of the LA that respondents were validly
terminated. The NLRC ruled that the closure of a business is an authorized cause sanctioned under Article 283 of the Labor Code
and one that is ultimately a management prerogative. The NLRC, however, modified the LAs Decision by increasing the amount
of financial assistance to two months salary out of compassionate justice. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the Decision appealed from is affirmed with modification as to
the award of the financial assistance.

SO ORDERED.[11]

Aggrieved by the NLRC Decision, petitioner then appealed to the CA, specifically questioning the grant of financial assistance to
respondents.
On May 28, 2004, the CA rendered a Decision reversing the Decision of the NLRC. The CA shared the view of the LA that
respondents should only be awarded one months salary as financial assistance and not two months salary as previously decreed
by the NLRC. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the assailed Decision is hereby REVERSED, and the 22 July
2002 Decision of the Labor Arbiter is hereby REINSTATED.

SO ORDERED.[12]

Petitioner then filed a motion for reconsideration, which was, however, denied by the CA in a Resolution dated October 28,
2004.

Hence, herein petition, with petitioner raising the following assignment of errors, to wit:

THERE IS NO LEGAL BASIS FOR THE COURT OF APPEALS AWARD OF FINANCIAL

ASSISTANCE EQUIVALENT TO ONE-MONTHS SALARY TO THE RESPONDENTS
AFTER ITS FINDING THAT SOLIDBANK HAS MORE THAN COMPLIED WITH THE MANDATE
OF THE LAW ON PAYMENT OF SEPARATION PAY.[13]

THE AWARD OF FINANCIAL ASSISTANCE CANNOT BE JUSTIFIED ON THE BASIS OF

COMPASSIONATE JUSTICE AND AS A FORM OF EQUITABLE RELIEF.[14]

TO SUSTAIN THE COURT OF APPEALS AWARD OF FINANCIAL ASSISTANCE TO THE 140

VALIDLY-DISMISSED RESPONDENTS WOULD RESULT IN A HIGHLY ANOMALOUS
SITUATION WHERE THE SAID RESPONDENTS WOULD BE ACCORDED BETTER BENEFITS
THAN OTHER FORMER SOLIDBANK EMPLOYEES WHO WERE SIMILARLY SITUATED.[15]

The petition is meritorious. The errors being interrelated, this Court shall discuss the same seriatim.

Before anything else, this Court shall first address the allegations raised by respondents in their Comment,[16] which deal with the
issue of the validity of their termination. Respondents, in the main, claim that their termination was unlawful as petitioner did
not really cease its operations.[17] Thus, notwithstanding their admission that the LA, the NLRC, and the CA all ruled in unison
that their termination was in accordance with law, respondents seek this Courts discretion to reverse such findings.

On this note, it is well settled that this Court is not a trier of facts. To begin with, the question of whether respondents
were dismissed for authorized cause is a question of fact which is beyond the province of a petition for review on certiorari. It is
fundamental that the scope of the Supreme Courts judicial review under Rule 45 of the Rules of Court is confined only to errors
of law. It does not extend to questions of fact; more so, in labor cases where the doctrine applies with greater force. [18]

The LA and the NLRC have already determined the factual issues, and these were affirmed by the CA. Thus, they are
accorded not only great respect but also finality, and are deemed binding upon this Court so long as they are supported by
substantial evidence. A heavy burden rests upon respondents to convince the Court that it should take exception from such a
settled rule.[19]
 Moreover, what is damning to the cause of the respondents is the fact that the issue of the validity of their dismissal is
now already final. As correctly manifested by petitioner, respondents had earlier filed with this Court a petition for
review[20] dated December 28, 2004, docketed as G.R. No. 165985, entitled Rodolfo Bombita, et al. v. Solidbank Corporation, et
al., which questioned the validity of their termination. A perusal of said petition shows that the issues raised therein are the very
same issues respondents now raise in their Comment. On February 21, 2005, this Courts Second Division issued a
Resolution[21] denying respondents petition for review. On September 20, 2005, an Entry of Judgment[22] was rendered. Based
on the foregoing, the validity of the termination of respondents is an issue that this Court must no longer look into as a necessary
consequence of the denial of their petition for review before this Court.

Now, going to the issues raised by petitioner, this Court finds the same to be impressed with merit.

Article 283 of the Labor Code provides:

ARTICLE 283. Closure of establishment and reduction of personnel. - The employer may also
terminate the employment of any employee due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking
unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on
the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof.
In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay
for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of
closures or cessation of operations of establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at
least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at
least six (6) months shall be considered one (1) whole year. [23]

Based on Article 283, in case of cessation of operations, the employer is only required to pay his employees a separation
pay of one month pay or at least one-half month pay for every year of service, whichever is higher. That is all that the law
requires.

In the case at bar, petitioner paid respondents the following: (a) separation pay computed at 150% of their gross
monthly pay per year of service; and (b) cash equivalent of earned and accrued vacation and sick leaves. Clearly, petitioner had
gone over and above the requirements of the law. Despite this, however, petitioner has been ordered to pay respondents an
additional amount, equivalent to one months salary, as a form of financial assistance.

The LA awarded the financial assistance out of compassionate justice. The CA affirmed such grant also out of
compassionate justice and as a form of equitable relief for the employees who were suddenly dismissed due to exigencies of
business.[24]

After a thorough consideration of the circumstances at bar, this Court finds that the award of financial assistance is
bereft of legal basis and serves to penalize petitioner who has complied with the requirements of the law.
 It behooves this Court as to why the CA affirmed the grant of financial assistance notwithstanding its pronouncement
that it would be inequitable to allow respondents to receive benefits than those prescribed by law and jurisprudence, to wit:

In the instant case, both the Labor Arbiter and the NLRC upheld the validity of the dismissal of the
employees and of the quitclaim agreements between the affected employees and employer Solidbank. However,
it was a strange occurrence when the NLRC granted an additional award of separation pay in an amount
equivalent to two months salary to each employee. This means that Solidbank now has the obligation to pay the
employees not only their wages, benefits and other privileges under the law, and separation pay in an amount
equivalent to 150% of their one months pay, but also financial assistance equivalent to two months pay to each
employee. Such a situation cannot be upheld by this Court. As discussed above, all that the law requires
in cases of dismissal due to an authorized cause is that the employer must pay financial
assistance or separation pay in an amount equivalent to one months pay or one-half months for
every year of service, whichever is higher. Solidbank has complied with the mandate of the law.
Hence, it would be unjust and inequitable to allow the employees to receive higher benefits than
those prescribed by the Labor Code and jurisprudence.[25]

Moreover, a review of jurisprudence relating to the application of compassionate and social justice in granting financial
assistance in labor cases shows that the same has been generally used in instances when an employee has been dismissed for
a just cause under Article 282 of the Labor Code and not when an employee has been dismissed for an authorized cause under
Article 283.

As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 [26] of the
Labor Code is not entitled to separation pay.[27] Although by way of exception, the grant of separation pay or some other financial
assistance may be allowed to an employee dismissed for just causes on the basis of equity. [28]

The reason that the law does not statutorily grant separation pay or financial assistance in instances of termination due
to a just cause is precisely because the cause for termination is due to the acts of the employee. In such instances, however, this
Court, inspired by compassionate and social justice, has in the past awarded financial assistance to dismissed employees when
circumstances warranted such an award.

In Central Philippines Bandag Retreaders, Inc. v. Diasnes,[29] this Court discussed the parameters of awarding
separation pay to dismissed employees as a measure of financial assistance, viz:

To reiterate our ruling in Toyota, labor adjudicatory officials and the CA must demur the award of
separation pay based on social justice when an employees dismissal is based on serious misconduct or willful
disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission of a crime
against the person of the employer or his immediate family - grounds under Art. 282 of the Labor Code
that sanction dismissals of employees. They must be most judicious and circumspect in awarding
separation pay or financial assistance as the constitutional policy to provide full protection to labor is not meant
to be an instrument to oppress the employers. The commitment of the Court to the cause of labor should not
embarrass us from sustaining the employers when they are right, as here. In fine, we should be more cautious in
awarding financial assistance to the undeserving and those who are unworthy of the liberality of the law.[30]
Thus, in Philippine Commercial International Bank v. Abad,[31] this Court, having considered the circumstances present therein
and as a measure of social justice, awarded separation pay to a dismissed employee for a just cause under Article 282. The same
concession was given by this Court in Aparente, Sr. v. National Labor Relations Commission[32] and Tanala v. National Labor
Relations Commission.[33]

Looking now at Article 283, this Court holds that the same was drafted by the legislature, taking the best interest of laborers in
mind. It is clear that the causes of the termination of an employee under Article 283 are due to circumstances beyond their
control, such as when management decides to reduce personnel based on valid grounds, or when the employer decides to cease
operations. Thus, the bias towards labor is very apparent, as the employer is statutorily required to pay separation pay, the
amount of which is also statutorily prescribed.

While the CA should not be faulted for sympathizing with the plight of respondents as they suddenly lost their means of
livelihood, this Court holds that it is precisely because of the sudden loss of employment − one that is beyond the control of
labor − that the law statutorily grants separation pay and dictates how the same should be computed. Thus, any business
establishment that decides to cease its operations has the burden of complying with the law. This Court should refrain from
adding more than what the law requires, as the same is within the realm of the legislature.

It bears to stress, however, that petitioner may, as it has done, grant on a voluntary and ex gratia basis, any amount
more than what is required by the law, but to insist that more financial assistance be given is certainly something that this Court
cannot countenance, as the same serves to penalize petitioner, which has already given more than what the law requires.
Moreover, any award of additional financial assistance to respondents would put them at an advantage and in a better position
than the rest of their co-employees who similarly lost their employment because of petitioners decision to cease its operations.

Withal, the law, in protecting the rights of the laborers, authorizes neither oppression nor self-destruction of the employer. While
the Constitution is committed to the policy of social justice and the protection of the working class, it should not be supposed
that every labor dispute will be automatically decided in favor of labor. The management also has its own rights, as such, are
entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with less privileges in life, the
Supreme Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such
favoritism, however, has not blinded the Court to the rule that justice is in every case for the deserving, to be dispensed in the
light of the established facts and applicable law and doctrine.[34]

WHEREFORE, premises considered, the petition is GRANTED. The May 28, 2004 Decision and October 28, 2004 Resolution
of the Court of Appeals, in CA-G.R SP No. 76879, are REVERSED and SET ASIDE.

SO ORDERED.
Employer-Employee Relationship
LVN PICTURES vs PHILIPPINE MUSICIANS Guild, GR. No. L-12582, Jan 28, 1961
110 Phil. 725

CONCEPCION, J.:
Petitioners herein, LVN Pictures, Inc. and Sampaguita Pictures, Inc., seek a review by certiorari of an order of the Court of
Industrial Relations, in Case No. 306-MC thereof, certifying the Philippine Musicians Guild (FFW), petitioner therein and
respondent herein, as the sole and exclusive bargaining agency of all musicians working with said companies, as well as with the
Premiere Productions, Inc., which has not appealed. The appeal of LVN Pictures, Inc., has been docketed as G. R. No. L-12582,
whereas G. R. No. L-12598 is the appeal of Sampaguita Pictures, Inc. Involving as they do the same order, the two cases have
been jointly heard in this Court, and will similarly be disposed of.

In its petition in the lower court, the Philippine Musicians Guild (FFW), hereafter referred to as the Guild, averred that
it is a duly registered legitimate labor organization; that LVN Pictures, Inc., Sampaguita Pictures, Inc., and Premiere
Productions, Inc. are corporations, duly organized under the Philippine laws, engaged in the making of motion pictures and in
the processing and distribution thereof; that said companies employ musicians for the purpose of making music recordings for
title music, background music, musical numbers, finale music and other incidental music, without which a motion picture is
incomplete; that ninety-five (95%) percent of all the musicians playing for the musical recording of said companies are members
of the Guild; and that the same has no knowledge of the existence of any other legitimate labor organization representing
musicians in said companies. Premised upon these allegations, the Guild prayed that it be certified as the sole and exclusive
bargaining agency for all musicians working in the aforementioned companies.

In their respective answers, the latter denied that they have any musicians as employees, and alleged that the musical
numbers in the films of the companies are furnished by independent contractors. The lower court, however, rejected this
pretense and sustained the theory of the Guild, with the result already adverted to. A reconsideration of the order complained of
having been denied by the Court en banc, LVN Pictures, Inc. and Sampaguita Pictures, Inc. filed these petitions for review by
certiorari.

Apart from impugning the conclusion of the lower court oil the status of the Guild members as alleged employees of the
film companies, the LVN Pictures, Inc., maintains that a petition for certification cannot be entertained when the existence of
employer-employee relationship between the parties is contested. However, this claim is neither borne out by any legal provision
nor supported by any authority. So long as, after due hearing, the parties are found to bear said relationship, as in the case at bar,
it is proper to pass upon the merits of the petition for certification.
It is next urged that a certification is improper in the present case, because "(a) the petition does not allege and no evidence was
presented that the alleged musicians-employees of the respondents constitute a proper bargaining unit, and (b) said alleged
musicians-employees represent a majority of the other numerous employees of the film companies constituting a proper
bargaining unit under section 12 (a) of Republic Act No. 875."

The absence of an express allegation that the members of the Guild constitute a proper bargaining unit is not fatal in a
certification proceeding, for the same is not a "litigation" in the sense in which this term is commonly understood, but a mere
investigation of a non-adversary, fact finding character, in which the investigating agency plays the part of a disinterested
investigator seeking merely to ascertain the desires of employees as to the matter of their representation. In connection
therewith, the court enjoys a wide discretion in determining the procedure necessary to insure the fair and free choice of
bargaining representatives by employees.[1] Moreover, it is alleged in the petition that the Guild is a duly registered legitimate
labor organization and that ninety-five (95%) per cent of the musicians playing for all the musical recordings of the film
companies involving in these cases are members of the Guild. Although, in its answer, the LVN Pictures, Inc. denied both
allegations, it appears that, at the hearing in the lower court, it was merely the status of the musicians as its employees that the
film companies really contested. Besides, the substantial difference between the work performed by said musicians and that of
other persons who participate in the production of a film, and the peculiar circumstances under which the services of the former
are engaged and rendered, suffice to show that they constitute a proper bargaining unit.

At this juncture, it should be noted that the action of the lower court in deciding upon an appropriate unit for collective
bargaining purposes is discretionary (N.L.R.B. vs. May Dept. Store Co., 66 Sup. Ct. 468, 90 L. ed. 145) and that its judgment in
this respect is entitled to almost complete finality, unless its action is arbitrary or capricious (Marshall Field & Co. vs. N.L.R.B.
[CCA. 1943], 135 F. 2d. 391), which is far from being so in the cases at bar.
Again, the Guild seeks to be, and was, certified as the sole and exclusive bargaining agency for the musicians working in the
aforesaid film companies. It does not intend to represent the other employees therein. Hence, it was not necessary for the Guild
to allege that its members constitute a majority of all the employees of said film companies, including those who
are not musicians.

The real issue in these cases, is whether or not the musicians in question are employees of the film companies. In this
connection the lower court had the following to say:
"As a normal and usual course of procedure employed by the companies when a picture is to be made, the producer invariably
chooses, from the musical directors, one who will furnish the musical background for a film. A price is agreed upon verbally
between the producer and musical director for the cost of furnishing such musical background. Thus, the musical director may
compose his own music specially written for or adapted to the picture. He engages his own men and pays the corresponding
compensation of the musicians under him.

"When the music is ready for recording, the musicians are summoned through 'call slips' in the name of the film company (Exh.
'D'), which show the name of the musician, his musical instrument, and the date, time and place where he will be picked up by
the truck of the film company. The film company provides the studio for the use of the musicians for that particular recording.
The musicians are also provided transportation to and from the studio by the company. Similarly, the company furnishes them
meals at dinner time.

"During the recording sessions, the motion picture director, who is an employee of the company, supervises the recording of the
musicians and tells what to do in every detail. He solely directs the performance of the musicians before the camera. As director,
he supervises the performance of all the actors including the musicians who appear in the scenes so that in the actual
performance to be shown on the screen, the musical director's intervention has stopped.

"And even in the recording sessions and during the actual shooting of a scene the technicians, soundmen and other employees of
the company assist in the operation. Hence, the work of the musicians, is an integral part of the entire motion picture since they
not only furnish the music but are also called upon to appear in the finished picture.

"The question to he determined next is what legal relationship exist between the musicians and the company in the light of the
foregoing facts.
"We are thus called upon to apply R. A. Act No. 875, which is substantially the same as and patterned after the Wagner Act and
the Taft-Hartley Law of the United States. Hence, reference to decisions of American Courts on these laws on the point-at-issue
is called for.
"Statutes are to be construed in the light of purposes to be achieved and the evils sought to be remedied. (U.S. vs. American
Tracking Association, 310 U.S. 534, 84 L. ed. 1345.)

"In the case of National Labor Relations Board vs. Hearst Publications, 322, U.S. 111, the United States Supreme Court said the
Wagner Act was designed to avert the 'substantial obstruction to the free flow of commerce which results from strikes and other
forms of industrial unrest by eliminating the causes of the unrest. Strikes and industrial unrest result from the refusal of
employers' to bargain collectively and the inability of workers to bargain successfully for improvement in their working
conditions. Hence, the purposes of the Act are to encourage collective bargaining and to remedy the workers' inability to
bargaining power, by protecting the exercise of full freedom, of association and designation of representatives of their own
choosing, for the purpose of negotiating the terms and conditions of their employment.'

"The mischief at which the Act is aimed and the remedies it offers are not confined exclusively to 'employees' within the
traditional legal distinctions, separating them from 'independent contractor.' Myriad forms of service relationship, with infinite
and subtle variations in the term of employment, blanket the nation's economy. Some are within this Act, others beyond its
coverage. Large numbers will fall clearly on one side or on the other, by whatever test may be applied. Inequality of bargaining
power in controversies of their wages, hours and working conditions may characterize the status of one group as of the other.
The former, when acting alone may be as helpless in dealing with the employer 'as dependent on his daily wage and as unable to
resist arbitrary and unfair treatment as the latter.'

"To eliminate the causes of labor dispute and industrial strike, Congress thought it necessary to create a balance of forces in
certain types of economic relationship. Congress recognized those economic relationships cannot be fitted neatly into the
containers designated as 'employee' and 'employer'. Employers and employees not in proximate relationship may be drawn into
common controversies by economic forces and that the very dispute sought to be avoided might involve employees' who are at
times brought into an economic relation ship with 'employers', who are not their 'employers'. In this light, the language of the
Act's definition of 'employee' or 'employer' should be determined broadly in doubtful situations, by underlying economic facts
rather than technically and exclusively established legal classifications. (NLRB vs. Blount, 131 F [2d] 585.)

"In other words, the scope of the term 'employee' must be understood with reference to the purposes of the Act and the facts
involved in the economic relationship. Where all the conditions of relation require protection, protection ought to be given.

"By declaring a worker an employee of the person for whom he works and by recognizing and protecting his rights as such, we
eliminate the cause of industrial unrest and consequently we promote industrial peace, because we enable him to negotiate an
agreement which will settle disputes regarding conditions of employment, through the process of collective bargaining.

"The statutory definition of the word 'employee' is of wide scope. As used in the Act, the term embraces 'any employee' that is all
employees in the conventional as well as in the" legal sense except those excluded by express provision. (Connor Lumber Co. 11
NLRB, 776.)

"It is the purpose and policy of Republic Act 875; (a) To eliminate the causes of industrial unrest by protecting the exercise by
employees of their right to self-organization for the purpose of collective bargaining, (b) To promote sound stable industrial
peace and the advancement of the general welfare, and the best interests of employers and employees by the settlement of issues
respecting terms and conditions of employment through the process of collective bargaining between employers and
representatives of their employees.

"The primary consideration is whether the declared policy and purpose of the Act can be effectuated by securing for the
individual worker the rights and protection guaranteed by the Act. The matter is not conclusively determined by a contract which
purports to establish the status of the worker, not as an employee.

"The work of the musical director and musicians is a functional and integral part of the enterprise performed at the same studio
substantially under the direction and control of the company.

"In other words, to determine whether a person who performs work for another is the latter's employee or an independent
contractor, the National Labor Relations Board relies on "the right of control' test. Under this test an employer-employee
relationship exists where the person for whom the services, are performed reserves the right to control not only the end to be
achieved, but also the manner and means to be used in reaching the end. (United Insurance Company, 108, NLRB No. 115.)

"Thus, in said similar case of Connor Lumber Company, the Supreme Court said:
'We find that the independent contractors and persons working under them are 'employees' within the meaning of Section 2 (3)
of its Act. However, we are of the opinion that the independent contractors have sufficient authority over the persons working
under their immediate supervision to warrant their exclusion from the unit. We shall include in the unit the employees working
under the supervision of the independent contractors, but exclude the contractors.'

"Notwithstanding that the employees are called independent contractors, the Board will hold them to be employees under the
Act where the extent of the employer's control over them indicates that the relationship is in reality one of employment. (John
Hancock life Insurance Co., 2375-D, 1940, Teller, Labor Dispute Collective Bargaining, Vol. ................).

"The right of control of the film company over the musicians is shown (1) by calling the musicians through 'call slips' in the name
of the company; (2) by arranging schedules in its studio for recording sessions; (3) by furnishing transportation and meals to
musicians; and (4) by supervising and directing in detail, through the motion picture director, the performance of the musicians
before the camera, in order to suit the music they are playing to the picture which is being flashed on the screen.

"Thus, in application of Philippine statutes and pertinent decision of the United States courts on the matter to the facts
established in this case, we cannot but conclude that to effectuate the policies of the Act and by virtue of the 'right of control' test,
the members of the Philippine Musicians Guild are employees of the three film companies and, therefore, entitled to right of
collective bargaining under Republic Act No. 875.

"In view of the fact that the three (3) film companies did not question the union's majority, the Philippine Musicians Guild is
hereby declared as the sole collective bargaining representative for all the musicians employed by the film companies."
We are fully in agreement with the foregoing conclusion and the reasons given in support thereof. Both are substantially in line
with the spirit of our decision in Maligaya Ship Watchmen Agency vs. Associated Watchmen and Security Union, 103 Phil., 920;
55 Off. Gaz., (52) 10681. In fact, the contention of the employers in the Maligaya cases, to the effect that they had dealt with
independent contractors, was stronger than that of the film companies in these cases. The third parties with whom the
management and workers contracted in the Maligaya cases were agencies registered with the Bureau of Commerce and duly
licensed by the City of Manila to engage in the business of supplying watchmen to steamship companies, with permits to engage
in said business issued by the City Mayor and the Collector of Customs. In the cases at bar, the musical directors with whom the
film companies claim to have dealt with had nothing comparable to the business standing of said watchmen agencies. In this
respect, the status of said musical directors is analogous to that of the alleged independent contractor in Caro vs. Rilloraza, 102
Phil., 61, with the particularity that the Caro case involved the enforcement of the liability of an employer under the Workmen's
Compensation Act, whereas the cases before us are merely concerned with the right of the Guild to represent the musicians as a
collective bargaining unit. Hence, there is less reason to be legalistic and technical in these cases, than in the Caro case.
Herein petitioners-appellants cite, in support of their appeal, the cases of Sunripe Coconut Product Co., Inc. vs. CIR, 83 Phil.,
518; 46 Off. Gaz., 5506, 5509; Philippine Manufacturing Co. vs. Santos Vda. de Geronimo, 96 Phil., 276; Viana vs. Al Lagadan,
99 Phil., 408; 54 Off. Gaz., (3) 644, and Josefa Vda. de Cruz vs. The Manila Hotel Co., 101 Phil., 358; 53 Off. Gaz., 8540; Instead
of favoring the theory of said petitioners-appellants, the case of the Sunripe Coconut Product Co., Inc. is authority for herein
respondents-appellees. It was held that, although engaged as piece-workers, under the "pakiao" system, the "parers" and
"shellers" involved in that case were, not independent contractors, but employees of said company, because "the requirement
imposed on the 'parers' to the effect that 'the nuts are pared whole or that there is not much meat wasted', in effect limits or
controls the means or details by which said workers are to accomplish their services" as in the cases before us.

The nature of the relation between the parties was not settled in the Viana case, the same having been remanded to the
Workmen's Compensation Commission for further evidence.
The case of the Philippine Manufacturing Co. involved a contract between said company and Eliano Garcia, who undertook to
paint a tank of the former. Garcia, in turn, engaged the services of Arcadio Geronimo, a laborer, who fell while painting the tank
and died in consequence of the injuries thus sustained by him. Inasmuch as the company was engaged in the manufacture of
soap, vegetable, lard, cooking oil and margarine, it was held that the connection between its business and the painting
aforementioned was purely casual; that Eliano Garcia was an independent contractor; that Geronimo was not an employee of the
company; and that the latter was not bound, therefore, to pay the compensation provided in the Workmen's Compensation Act.
Unlike the Philippine Manufacturing case, the relation between the business of herein petitioners-appellants and the work of the
musicians in question is not casual. As held in the order appealed from which, in this respect, is not contested by herein
petitioners-appellants "the work of the musicians is an integral part of the entire motion picture." Indeed, one can hardly find
modern films without music therein. Hence, in the Caro case (supra) the owner and operator of buildings for rent was held
bound to pay the indemnity prescribed in the Workmen's Compensation Act for the injury suffered by a carpenter while working
as such in one of said buildings even though his services had been allegedly engaged by a third party who had directly contracted
with said owner. In other words, the repair work had not merely a casual connection with the business of said owner. It was a
necessary incident thereof, just as music is in the production of motion pictures.

The case of Josefa Vda. de Cruz vs. The Manila Hotel Co., 101 Phil., 358; 63 Off. Gaz., 8540, differs materially from the
present cases. It involved the interpretation of Republic Act No, 660, which amends the law creating and establishing the
Government Service Insurance System. No labor law was sought to be construed in that case. In fact, the same was originally
heard in the Court of First Instance of Manila, the decision of which was, on appeal, affirmed by the Supreme Court. The
meaning or scope of the term "employee", as used in the Industrial Peace Act (Republic Act No. 875) was not touched therein.
Moreover, the subject-matter of said case was a contract between the management of the Manila Hotel, on the one hand, and
Tirso Cruz, on the other, whereby the latter agreed to furnish the former the services of his orchestra, consisting of 15 musicians,
including Tirso Cruz, "from 7:30 p.m. to closing time daily". In the language of this Court in that case, "what pieces the orchestra
shall play, and how the music shall be arranged or directed, the intervals and other details such are left to
the leader's discretion."

This is not the situation obtaining in the cases at bar. The musical directors above referred to have no such control over
the musicians involved in the present case. Said musical directors control neither the music to be played, nor the musicians
playing it. The film companies summon the musicians to work, through the musical directors. The film companies, through the
musical directors, fix the date, the time and the place of work. The film companies, not the musical directors, provide the
transportation to and from the studio. The film companies furnish meal at dinner time.

What is more in the language of the order appealed from "during the recording sessions, the motion picture
director who is an employee of the company" not the musical director "supervises the recording of the musicians and tells them
what to do in every detail." The motion picture director not the musical director "solely directs the performance of the
musicians before the camera". The motion picture director "supervises the performance of all the actors, including the
musicians who appear in the scenes, so that in the actual performance to be shown on the screen, the musical director's
intervention has stopped." Or, as testified to in the lower court, "the movie director tells the musical director what to do; tells the
music to be cut or tells additional music in this part or he eliminates the entire music he does not (want) or he may want more
drums or more violin or piano, as the case may be". The movie director "directly controls the activities of the musicians". He
"says he wants more drums and the drummer plays more" or "if he wants more violin or he does not like that".

It is well settled that "an employer-employee relationship exists * * * where the person for whom the services are
performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end * *."
(Alabama Highway Express Co. vs. Local, 612, 108 S. 2d 350.) The decisive nature of said control over the "means to be used", is
illustrated in the case of Gilchrist Timber Co., et al., Local No. 2530 (73 NLRB No. 210, pp. 1197, 1199-1201), in which, by reason
of said control, the employer-employee relationship was held to exist between the management and the workers,
notwithstanding the intervention of an alleged independent contractor, who had, and exercised, the power to hire and fire said
workers. The aforementioned control over "the means to be used" in reaching the desired end is possessed and exercised by the
film companies over the musicians in the cases before us.

Wherefore, the order appealed from is hereby affirmed, with costs against petitioners herein. It is so ordered.
FIVE J TAXI vs NLRC, GR No. 111474, August 22, 1994
G.R. No. 111474

REGALADO, J.:
Petitioners Five J Taxi and/or Juan S. Armamento filed this special civil action for certiorari to annul the decision[1] of
respondent National Labor Relations Commission (NLRC) ordering petitioners to pay private respondents Domingo Maldigan
and Gilberto Sabsalon their accumulated deposits and car wash payments, plus interest thereon at the legal rate from the date of
promulgation of judgment to the date of actual payment, and 10% of the total amount as and for attorney's fees.
We have given due course to this petition for, while to the cynical the de minimis amounts involved should not impose upon the
valuable time of this Court, we find therein a need to clarify some issues the resolution of which are important to small wage
earners such as taxicab drivers. As we have heretofore repeatedly demonstrated, this Court does not exist only for the rich or the
powerful, with their reputed monumental cases of national impact. It is also the Court of the poor or the
underprivileged, with the actual quotidian problems that beset their individual lives.

Private respondents Domingo Maldigan and Gilberto Sabsalon were hired by the petitioners as taxi drivers[2] and, as
such, they worked for 4 days weekly on a 24-hour shifting schedule. Aside from the daily "boundary" of P700.00 for air-
conditioned taxi or P450.00 for non-airconditioned taxi, they were also required to pay P20.00 for car washing, and to further
make a P15.00 deposit to answer for any deficiency in their "boundary," for every actual working day.

In less than 4 months after Maldigan was hired as an extra driver by the petitioners, he already failed to report for work
for unknown reasons. Later, petitioners learned that he was working for "Mine of Gold" Taxi Company. With respect to Sabsalon,
while driving a taxicab of petitioners on September 6, 1983, he was held up by his armed passenger who took all his money and
thereafter stabbed him. He was hospitalized and after his discharge, he went to his home province to recuperate.
In January 1987, Sabsalon was re-admitted by petitioners as a taxi driver under the same terms and conditions as when he was
first employed, but his working schedule was made on an "alternative basis," that is, he drove only every other day. However, on
several occasions, he failed to report for work during his schedule.

On September 22, 1991, Sabsalon failed to remit his "boundary" of P700.00 for the previous day. Also, he abandoned his
taxicab in Makati without fuel refill worth P300.00. Despite repeated requests of petitioners for him to report for work, he
adamantly refused. Afterwards it was revealed that he was driving a taxi for "Bulaklak Company."
Sometime in 1989, Maldigan requested petitioners for the reimbursement of his daily cash deposits for 2 years, but herein
petitioners told him that not a single centavo was left of his deposits as these were not even enough to cover the amount spent for
the repairs of the taxi he was driving. This was allegedly the practice adopted by petitioners to recoup the expenses incurred in
the repair of their taxicab units. When Maldigan insisted on the refund of his deposit, petitioners terminated his services.
Sabsalon, on his part, claimed that his termination from employment was effected when he refused to pay for the washing of his
taxi seat covers.

On November 27, 1991, private respondents filed a complaint with the Manila Arbitration Office of the
National Labor Relations Commission charging petitioners with illegal dismissal and illegal deductions. That
complaint was dismissed, the labor arbiter holding that it took private respondents two years to file the same
and such unreasonable delay was not consistent with the natural reaction of a person who claimed to be
unjustly treated, hence the filing of the case could be interpreted as a mere afterthought.
 Respondent NLRC concurred in said findings, with the observation that private respondents failed to controvert the
evidence showing that Maldigan was employed by "Mine of Gold" Taxi Company from February 10, 1987 to December 10, 1990;
that Sabsalon abandoned his taxicab on September 1, 1990; and that they voluntarily left their jobs for similar employment with
other taxi operators. It, accordingly, affirmed the ruling of the labor arbiter that private respondents' services were not illegally
terminated. It, however, modified the decision of the labor arbiter by ordering petitioners to pay private respondents the awards
stated at the beginning of this resolution.

Petitioners' motion for reconsideration having been denied by the NLRC, this petition is now before us imputing grave
abuse of discretion on the part of said public respondent.

This Court has repeatedly declared that the factual findings of quasi-judicial agencies like the NLRC, which have acquired
expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but, at times, finality if
such findings are supported by substantial evidence.[3] Where, however, such conclusions are not supported by the evidence, they
must be struck down for being whimsical and capricious and, therefore, arrived at with grave abuse of discretion.[4]
Respondent NLRC held that the P15.00 daily deposits made by respondents to defray any shortage in their
"boundary" is covered by the general prohibition in Article 114 of the Labor Code against requiring employees
to make deposits, and that there is no showing that the Secretary of Labor has recognized the same as a
"practice" in the taxi industry. Consequently, the deposits made were illegal and the respondents must be
refunded therefor.
Article 114 of the Labor Code provides as follows:

"Article 114. Deposits for loss or damage. - No employer shall require his worker to make deposits from which
deductions shall be made for the reimbursement of loss of or damage to tools, materials; or equipment supplied by the employer,
except when the employer is engaged in such trades, occupations or business where the practice of making deposits is a
recognized one, or is necessary or desirable as determined by the Secretary of Labor in appropriate rules and regulations."

It can be deduced therefrom that the said article provides the rule on deposits for loss or damage to tools, materials or
equipments supplied by the employer. Clearly, the same does not apply to or permit deposits to defray any deficiency which the
taxi driver may incur in the remittance of his "boundary." Also, when private respondents stopped working for petitioners, the
alleged purpose for which petitioners required such unauthorized deposits no longer existed. In other case, any balance due to
private respondents after proper accounting must be returned to them with legal interest.
However, the unrebutted evidence with regard to the claim of Sabsalon is as follows:

DEPOSITS SHORTAGES
YEAR VALES

1987 P1,403.00 P 567.00 P1,000.00

1988 720.00 760.00 200.00

1989 686.00 130.00 1,500.00

1990 605.00 570.00 --

1991 165.00 2,300.00 --

P3,579.00 P4,327.00 P2,700.00

The foregoing accounting shows that from 1987-1991, Sabsalon was able to withdraw his deposits through vales or he incurred
shortages, such that he is even indebted to petitioners in the amount of P3,448.00. With respect to Maldigan's deposits, nothing
was mentioned questioning the same even in the present petition. We accordingly agree with the recommendation of the
Solicitor General that since the evidence shows that he had not withdrawn the same, he should be reimbursed the amount of his
accumulated cash deposits.[5]

On the matter of the car wash payments, the labor arbiter had this to say in his decision: "Anent the issue of illegal
deductions, there is no dispute that as a matter of practice in the taxi industry, after a tour of duty, it is incumbent upon the
driver to restore the unit he has driven to the same clean condition when he took it out, and as claimed by the respondents
(petitioners in the present case), complainant(s) (private respondents herein) were made to shoulder the expenses for washing,
the amount doled out was paid directly to the person who washed the unit, thus we find nothing illegal in this practice, much
more (sic) to consider the amount paid by the driver as illegal deduction in the context of the law."[6] (Words in parentheses
added.)

Consequently, private respondents are not entitled to the refund of the P20.00 car wash payments they made. It will be
noted that there was nothing to prevent private respondents from cleaning the taxi units themselves, if they wanted to save their
P20.00. Also, as the Solicitor General correctly noted, car washing after a tour of duty is a practice in the taxi industry, and is, in
fact, dictated by fair play.

On the last issue of attorney's fees or service fees for private respondents' authorized representative, Article 222 of the
Labor Code, as amended by Section 3 of Presidential Decree No. 1691, states that non-lawyers may appear before the NLRC or
any labor arbiter only (1) if they represent themselves, or (2) if they represent their organization or the members thereof. While it
may be true that Guillermo H. Pulia was the authorized representative of private respondents, he was a non-lawyer who did not
fall in either of the foregoing categories. Hence, by clear mandate of the law, he is not entitled to attorney's fees.
Furthermore, the statutory rule that an attorney shall be entitled to have and recover from his client a reasonable compensation
for his services[7] necessarily imports the existence of an attorney-client relationship as a condition for the recovery of attorney's
fees, and such relationship cannot exist unless the client's representative is a lawyer.[8]

WHEREFORE, the questioned judgment of respondent National Labor Relations Commission is hereby MODIFIED by
deleting the awards for reimbursement of car wash expenses and attorney's fees and directing said public respondent to order
and effect the computation and payment by petitioners of the refund for private respondent Domingo Maldigan's deposits, plus
legal interest thereon from the date of finality of this resolution up to the date of actual payment thereof.
SO ORDERED.
Labor Standards Proper (Article 82-90) Coverage
APEX MINING vs NLRC, GR No. 94951, April 22, 1991
273 Phil. 477
GANCAYCO, J.:
Is the househelper in the staff houses of an industrial company a domestic helper or a regular employee of the said firm? This is
the novel issue raised in this petition.

Private respondent Sinclitica Candido was employed by petitioner Apex Mining Company, Inc. on May 18, 1973 to perform
laundry services at its staff house located at Masara, Maco, Davao del Norte. In the beginning, she was paid on a piece rate
basis. However, on January 17, 1982, she was paid on a monthly basis at P250.00 a month which was ultimately increased to
P575.00 a month.

On December 18, 1987, while she was attending to her assigned task and she was hanging her laundry, she accidentally slipped
and hit her back on a stone. She reported the accident to her immediate supervisor Mila de la Rosa and to the personnel officer,
Florendo D. Asirit. As a result of the accident she was not able to continue with her work. She was permitted to go on leave for
medication. De la Rosa offered her the amount of P2,000.00 which was eventually increased to P5,000.00 to persuade her to
quit her job, but she refused the offer and preferred to return to work. Petitioner did not allow her to return to work and
dismissed her on February 4, 1988.

On March 11, 1988, private respondent filed a request for assistance with the Department of Labor and Employment. After the
parties submitted their position papers as required by the labor arbiter assigned to the case on August 24, 1988 the latter
rendered a decision, the dispositive part of which reads as follows:

"WHEREFORE, Conformably With The Foregoing, judgment is hereby rendered ordering the respondent, Apex Mining
Company, Inc., Masara, Davao del Norte, to pay the complainant, to wit:
1. Salary Differential P16,289.20
2. Emergency Living Allowance 12,430.00
3. 13th Month Pay Differential 1,322.32
Separation Pay
4. (One-month for every year of 25,119.90
service (1973-1988)
or in the total of FIFTY FIVE THOUSAND ONE HUNDRED SIXTY ONE PESOS AND 42/100 (P55,161.42).

SO ORDERED."[1]
Not satisfied therewith, petitioner appealed to the public respondent National Labor Relations Commission (NLRC), wherein in
due course a decision was rendered by the Fifth Division thereof on July 20, 1989 dismissing the appeal for lack of merit and
affirming the appealed decision. A motion for reconsideration thereof was denied in a resolution of the NLRC dated June 29,
1990.

Hence, the herein petition for review by certiorari, which appropriately should be a special civil action for certiorari, and which
in the interest of justice, is hereby treated as such.[2] The main thrust of the petition is that private respondent should be treated
as a mere househelper or domestic servant and not as a regular employee of petitioner.

The petition is devoid of merit.

Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms "househelper" or "domestic servant" are defined
as follows:

"The term 'househelper' as used herein is synonymous to the term 'domestic servant' and shall refer to any person, whether male
or female, who renders services in and about the employer's home and which services are usually necessary or desirable for the
maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's
family."[3]
The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's home to
minister exclusively to the personal comfort and enjoyment of the employer's family. Such definition covers family drivers,
domestic servants, laundry women, yayas, gardeners, houseboys and other similar househelps.

The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company, like petitioner
who attends to the needs of the company's guests and other persons availing of said facilities. By the same token, it cannot be
considered to extend to the driver, houseboy, or gardener exclusively working in the company, the staffhouses and its premises.
They may not be considered as within the meaning of a "househelper" or "domestic servant" as above-defined by law.

The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be
true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may
be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while
in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural
or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such
instance, they are employees of the company or employer in the business concerned entitled to the privileges of a regular
employee.

Petitioner contends that it is only when the househelper or domestic servant is assigned to certain aspects of the business of the
employer that such househelper or domestic servant may be considered as such an employee. The Court finds no merit in
making any such distinction. The mere fact that the househelper or domestic servant is working within the premises of the
business of the employer and in relation to or in connection with its business, as in its staffhouses for its guests or even for its
officers and employees, warrants the conclusion that such househelper or domestic servant is and should be considered as a
regular employee of the employer and not as a mere family househelper or domestic servant as contemplated in Rule XIII,
Section 1 (b), Book 3 of the Labor Code, as amended.

Petitioner denies having illegally dismissed private respondent and maintains that respondent abandoned her work. This
argument notwithstanding, there is enough evidence to show that because of an accident which took place while private
respondent was performing her laundry services, she was not able to work and was ultimately separated from the service. She is,
therefore, entitled to appropriate relief as a regular employee of petitioner. Inasmuch as private respondent appears not to be
interested in returning to her work for valid reasons, the payment of separation pay to her is in order.

WHEREFORE, the petition is DISMISSED and the appealed decision and resolution of public respondent NLRC are hereby
AFFIRMED. No pronouncement as to costs.

SO ORDERED.
Holidays (Article 93, 94) Implication of holidays in labor laws
ASIAN TRANSMISSION vs CA; GR No. 144664; March 15, 2004
469 Phil. 496

CARPIO MORALES, J.:

Petitioner, Asian Transmission Corporation, seeks via petition for certiorari under Rule 65 of the 1995 Rules of Civil Procedure
the nullification of the March 28, 2000 Decision[1] of the Court of Appeals denying its petition to annul 1) the March 11, 1993
"Explanatory Bulletin"[2] of the Department of Labor and Employment (DOLE) entitled "Workers' Entitlement to Holiday Pay on
April 9, 1993, Araw ng Kagitingan and Good Friday", which bulletin the DOLE reproduced on January 23, 1998, 2) the July 31,
1998 Decision[3] of the Panel of Voluntary Arbitrators ruling that the said explanatory bulletin applied as well to April 9, 1998,
and 3) the September 18, 1998[4]Resolution of the Panel of Voluntary Arbitration denying its Motion for Reconsideration.
The following facts, as found by the Court of Appeals, are undisputed:

The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory
Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9,
1993, whether unworked, which[,] apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng
Kagitingan [which is also a legal holiday]. The bulletin reads:
"On the correct payment of holiday compensation on April 9, 1993 which apart from being Good Friday is also Araw ng
Kagitingan, i.e., two regular holidays falling on the same day, this Department is of the view that the covered employees are
entitled to at least two hundred percent (200%) of their basic wage even if said holiday is unworked. The first 100% represents
the payment of holiday pay on April 9, 1993 as Good Friday and the second 100% is the payment of holiday pay for the same date
as Araw ng Kagitingan.

Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan . . .
Despite the explanatory bulletin, petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only 100%
of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested.
In accordance with Step 6 of the grievance procedure of the Collective Bargaining Agreement (CBA) existing between petitioner
and BATLU, the controversy was submitted for voluntary arbitration. . . . On July 31, 1998, the Office of the Voluntary
Arbitrator rendered a decision directing petitioner to pay its covered employees "200% and not just 100% of their regular
daily wages for the unworked April 9, 1998 which covers two regular holidays, namely, Araw ng Kagitignan and Maundy
Thursday." (Emphasis and underscoring supplied)
Subject of interpretation in the case at bar is Article 94 of the Labor Code which reads:
ART. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to
twice his regular rate; and
(c) As used in this Article, "holiday" includes: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of
May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day
designated by law for holding a general election,
which was amended by Executive Order No. 203 issued on June 30, 1987, such that the regular holidays are now:

1. New Year's Day January 1

2. Maundy Thursday Movable Date
 3. Good Friday Movable Date
4. Araw ng Kagitingan April 9
(Bataan and Corregidor Day)
5. Labor Day May 1
6. Independence Day June 12
7. National Heroes Day Last Sunday of August
8. Bonifacio Day November 30
9. Christmas Day December 25
10. Rizal Day December 30

In deciding in favor of the Bisig ng Asian Transmission Labor Union (BATLU), the Voluntary Arbitrator held that Article 94 of
the Labor Code provides for holiday pay for every regular holiday, the computation of which is determined by a legal formula
which is not changed by the fact that there are two holidays falling on one day, like on April 9, 1998 when it was Araw ng
Kagitingan and at the same time was Maundy Thursday; and that that the law, as amended, enumerates ten regular holidays for
every year should not be interpreted as authorizing a reduction to nine the number of paid regular holidays "just because April 9
(Araw ng Kagitingan) in certain years, like 1993 and 1998, is also Holy Friday or Maundy Thursday."
In the assailed decision, the Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective
Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes
their intent to considerAraw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid
legal holidays during the effectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance from
the clear intent that all holidays shall be compensated."[5]

The Court of Appeals further held that "in the absence of an explicit provision in law which provides for [a] reduction of holiday
pay if two holidays happen to fall on the same day, any doubt in the interpretation and implementation of the Labor Code
provisions on holiday pay must be resolved in favor of labor."
By the present petition, petitioners raise the following issues:
I
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
ERRONEOUSLY INTERPRETING THE TERMS OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE
PARTIES AND SUBSTITUTING ITS OWN JUDGMENT IN PLACE OF THE AGREEMENTS MADE BY THE PARTIES
THEMSELVES
II
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING
THAT ANY DOUBTS ABOUT THE VALIDITY OF THE POLICIES ENUNCIATED IN THE EXPLANATORY BULLETIN WAS
LAID TO REST BY THE REISSUANCE OF THE SAID EXPLANATORY BULLETIN
III
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
UPHOLDING THE VALIDITY OF THE EXPLANATORY BULLETIN EVEN WHILE ADMITTING THAT THE SAID BULLEITN
WAS NOT AN EXAMPLE OF A JUDICIAL, QUASI-JUDICIAL, OR ONE OF THE RULES AND REGULATIONS THAT
[Department of Labor and Employment] DOLE MAY PROMULGATE
IV
WHETHER OR NOT THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) BY ISSUING
EXPLANATORY BULLETIN DATED MARCH 11, 1993, IN THE GUISE OF PROVIDING GUIDELINES ON ART. 94 OF THE
 LABOR CODE, COMMITTED GRAVE ABUSE OF DISCRETION, AS IT LEGISLATED AND INTERPRETED LEGAL
PROVISIONS IN SUCH A MANNER AS TO CREATE OBLIGATIONS WHERE NONE ARE INTENDED BY THE LAW
V
WHETHER OR NOT THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
SUSTAINING THE SECRETARY OF THE DEPARTMENT OF LABOR IN REITERATING ITS EXPLANATORY BULLETIN
DATED MARCH 11, 1993 AND IN ORDERING THAT THE SAME POLICY OBTAINED FOR APRIL 9, 1998 DESPITE THE
RULINGS OF THE SUPREME COURT TO THE CONTRARY
VI
WHETHER OR NOT RESPONDENTS' ACTS WILL DEPRIVE PETITIONER OF PROPERTY WITHOUT DUE PROCESS BY
THE "EXPLANATORY BULLETIN" AS WELL AS EQUAL PROTECTION OF LAWS

The petition is devoid of merit.

At the outset, it bears noting that instead of assailing the Court of Appeals Decision by petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, petitioner lodged the present petition for certiorari under Rule 65.
[S]ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise
of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action
of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and
executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction.
The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action
under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear
that the decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or
proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the
appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of
judgment or denial of motion for reconsideration.
xxx xxx xxx
For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and
adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and
adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or
agency. In this case, appeal was not only available but also a speedy and adequate remedy.[6]
The records of the case show that following petitioner's receipt on August 18, 2000 of a copy of the August 10, 2000 Resolution
of the Court of Appeals denying its Motion for Reconsideration, it filed the present petition for certiorari on September 15, 2000,
at which time the Court of Appeals decision had become final and executory, the 15-day period to appeal it under Rule 45 having
expired.

Technicality aside, this Court finds no ground to disturb the assailed decision.
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to
labor.[7] Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions.
In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay."[8] It is also
intended to enable the worker to participate in the national celebrations held during the days identified as with great historical
and cultural significance.

Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day
(November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to
commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day
(May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while
the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family.
As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. [9] The
provision is mandatory,[10] regardless of whether an employee is paid on a monthly or daily basis.[11] Unlike a bonus, which is a
management prerogative,[12] holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the
enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the
ten holiday pay benefits a worker is entitled to receive.

It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law
must be taken to mean exactly what it says.[13] In the case at bar, there is nothing in the law which provides or indicates that the
entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.
Petitioner's assertion that Wellington v. Trajano[14] has "overruled" the DOLE March 11, 1993 Explanatory Bulletin does not lie.
In Wellington, the issue was whether monthly-paid employees are entitled to an additional day's pay if a holiday falls on a
Sunday. This Court, in answering the issue in the negative, observed that in fixing the monthly salary of its
employees, Wellington took into account "every working day of the year including the holidays specified by law and excluding
only Sunday." In the instant case, the issue is whether daily-paid employees are entitled to be paid for two regular holidays
which fall on the same day.[15]

In any event, Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions,
including its implementing rules and regulations, shall be resolved in favor of labor. For the working man's welfare should be the
primordial and paramount consideration.[16]

Moreover, Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code provides that "Nothing in the law or the
rules shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked regular holidays
as provided in existing individual or collective agreement or employer practice or policy." [17]
From the pertinent provisions of the CBA entered into by the parties, petitioner had obligated itself to pay for the legal holidays
as required by law. Thus, the 1997-1998 CBA incorporates the following provision:
ARTICLE XIV
PAID LEGAL HOLIDAYS
The following legal holidays shall be paid by the COMPANY as required by law:
1. New Year's Day (January 1st)
2. Holy Thursday (moveable)
3. Good Friday (moveable)
4. Araw ng Kagitingan (April 9th)
5. Labor Day (May 1st)
6. Independence Day (June 12th)
7. Bonifacio Day [November 30]
8. Christmas Day (December 25th)
9. Rizal Day (December 30th)
10. General Election designated by law, if declared public non-working holiday
11. National Heroes Day (Last Sunday of August)

Only an employee who works on the day immediately preceding or after a regular holiday shall be entitled to the holiday pay.
A paid legal holiday occurring during the scheduled vacation leave will result in holiday payment in addition to normal vacation
pay but will not entitle the employee to another vacation leave.
Under similar circumstances, the COMPANY will give a day's wage for November 1st and December 31st whenever declared a
holiday. When required to work on said days, the employee will be paid according to Art. VI, Sec. 3B hereof. [18]
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
SAN MIGUEL CORPORATION vs CA; GR. No. 146775; January 30, 2002

DECISION

KAPUNAN, J.:

Assailed in the petition before us are the decision, promulgated on 08 May 2000, and the resolution, promulgated on 18
October 2000, of the Court of Appeals in CA G.R. SP-53269.
The facts of the case are as follows:
On 17 October 1992, the Department of Labor and Employment (DOLE), Iligan District Office, conducted a routine
inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the course of the inspection, it was
discovered that there was underpayment by SMC of regular Muslim holiday pay to its employees. DOLE sent a copy of the
inspection result to SMC and it was received by and explained to its personnel officer Elena dela Puerta.[1] SMC contested the
findings and DOLE conducted summary hearings on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Still, SMC
failed to submit proof that it was paying regular Muslim holiday pay to its employees. Hence, Alan M. Macaraya, Director IV of
DOLE Iligan District Office issued a compliance order, dated 17 December 1993, directing SMC to consider Muslim holidays as
regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from the receipt of
the order.
SMC appealed to the DOLE main office in Manila but its appeal was dismissed for having been filed late. The dismissal of
the appeal for late filing was later on reconsidered in the order of 17 July 1998 after it was found that the appeal was filed within
the reglementary period. However, the appeal was still dismissed for lack of merit and the order of Director Macaraya was
affirmed.
SMC went to this Court for relief via a petition for certiorari, which this Court referred to the Court of Appeals pursuant
to St. Martin Funeral Homes vs. NLRC.[2]
The appellate court, in the now questioned decision, promulgated on 08 May 2000, ruled, as follows:

WHEREFORE, the Order dated December 17, 1993 of Director Macaraya and Order dated July 17, 1998 of Undersecretary
Espaol, Jr. is hereby MODIFIED with regards the payment of Muslim holiday pay from 200% to 150% of the employee's basic
salary. Let this case be remanded to the Regional Director for the proper computation of the said holiday pay.
SO ORDERED.[3]

Its motion for reconsideration having been denied for lack of merit, SMC filed a petition for certiorari before this Court,
alleging that:

PUBLIC RESPONDENTS SERIOUSLY ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION WHEN THEY GRANTED
MUSLIM HOLIDAY PAY TO NON-MUSLIM EMPLOYEES OF SMC-ILICOCO AND ORDERING SMC TO PAY THE SAME
RETROACTIVE FOR ONE (1) YEAR FROM THE DATE OF THE PROMULGATION OF THE COMPLIANCE ORDER ISSUED
ON DECEMBER 17, 1993, IT BEING CONTRARY TO THE PROVISIONS, INTENT AND PURPOSE OF P.D. 1083 AND
PREVAILING JURISPRUDENCE.
THE ISSUANCE OF THE COMPLIANCE ORDER WAS TAINTED WITH GRAVE ABUSE OF DISCRETION IN THAT SAN
MIGUEL CORPORATION WAS NOT ACCORDED DUE PROCESS OF LAW; HENCE, THE ASSAILED COMPLIANCE ORDER
AND ALL SUBSEQUENT ORDERS, DECISION AND RESOLUTION OF PUBLIC RESPONDENTS WERE ALL ISSUED WITH
GRAVE ABUSE OF DISCRETION AND ARE VOID AB INITIO.
THE HON. COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT DECLARED THAT REGIONAL
DIRECTOR MACARAYA, UNDERSECRETARY TRAJANO AND UNDERSECRETARY ESPAOL, JR., WHO ALL LIKEWISE
ACTED WITH GRAVE ABUSE OF DISCRETION AND WITHOUT OR IN EXCESS OF THEIR JURISDICTION, HAVE
JURISDICTION IN ISSUING THE ASSAILED COMPLIANCE ORDER AND SUBSEQUENT ORDERS, WHEN IN FACT THEY
HAVE NO JURISDICTION OR HAS LOST JURISDICTION OVER THE HEREIN LABOR STANDARD CASE. [4]

At the outset, petitioner came to this Court via a petition for certiorari under Rule 65 instead of an appeal under Rule 45 of
the 1997 Rules of Civil Procedure. In National Irrigation Administration vs. Court of Appeals,[5] the Court declared:

x x x (S)ince the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the
exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action
of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and
executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction.
The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action
under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear
that decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or
proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the
appellate process over the original case. Under Rule 45 the reglementary period to appeal is fifteen (15) days from notice of
judgment or denial of motion for reconsideration.

xxx

For the writ of certiorari under Rule 65 of the Rules of Court to issue, a petitioner must show that he has no plain, speedy and
adequate remedy in the ordinary course of law against its perceived grievance. A remedy is considered "plain, speedy and
adequate" if it will promptly relieve the petitioner from the injurious effects of the judgment and the acts of the lower court or
agency. In this case, appeal was not only available but also a speedy and adequate remedy.[6]

Well-settled is the rule that certiorari cannot be availed of as a substitute for a lost appeal.[7] For failure of petitioner to file
a timely appeal, the questioned decision of the Court of Appeals had already become final and executory.
In any event, the Court finds no reason to reverse the decision of the Court of Appeals.
Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083, [8] otherwise
known as the Code of Muslim Personal Laws, which states:

Art. 169. Official Muslim holidays. - The following are hereby recognized as legal Muslim holidays:

(a) Amun Jadīd (New Year), which falls on the first day of the first lunar month of Muharram;
(b) Maulid-un-Nabī (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month
of Rabi-ul-Awwal;
(c) Lailatul Isrā Wal Mirāj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty-
seventh day of the seventh lunar month of Rajab;
(d) Īd-ul-Fitr (Hari Raya Puasa), which falls on the first day of the tenth lunar month of Shawwal, commemorating
the end of the fasting season; and
(e) Īd-ūl-Adhā (Hari Raya Haji),which falls on the tenth day of the twelfth lunar month of Dhūl-Hijja.

Art. 170. Provinces and cities where officially observed. - (1) Muslim holidays shall be officially observed in the Provinces of
Basilan, Lanao del Norte, Lanao del Sur, Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and Zamboanga and in such
other Muslim provinces and cities as may hereafter be created;
(2) Upon proclamation by the President of the Philippines, Muslim holidays may also be officially observed in other provinces
and cities.

The foregoing provisions should be read in conjunction with Article 94 of the Labor Code, which provides:

Art. 94. Right to holiday pay. -

(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate; x x x.

Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that (t)he provisions of this Code shall be
applicable only to Muslims x x x. However, there should be no distinction between Muslims and non-Muslims as regards
payment of benefits for Muslim holidays. The Court of Appeals did not err in sustaining Undersecretary Espaol who stated:

Assuming arguendo that the respondents position is correct, then by the same token, Muslims throughout the Philippines are
also not entitled to holiday pays on Christian holidays declared by law as regular holidays. We must remind the respondent-
appellant that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid
down by laws and certainly not on the basis of the workers faith or religion.

At any rate, Article 3(3) of Presidential Decree No. 1083 also declares that x x x nothing herein shall be construed to operate to
the prejudice of a non-Muslim.
In addition, the 1999 Handbook on Workers Statutory Benefits, approved by then DOLE Secretary Bienvenido E.
Laguesma on 14 December 1999 categorically stated:

Considering that all private corporations, offices, agencies, and entities or establishments operating within the designated
Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christians working within the
Muslim areas may not report for work on the days designated by law as Muslim holidays.[9]

On the question regarding the jurisdiction of the Regional Director Allan M. Macaraya, Article 128, Section B of the Labor
Code, as amended by Republic Act No. 7730, provides:

Article 128. Visitorial and enforcement power. -

xxx

(b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary, and in cases where the
relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of
this Code and other labor legislation based on the findings of labor employment and enforcement officers or
industrial safety engineers made in the course of the inspection. The Secretary or his duly authorized
representative shall issue writs of execution to the appropriate authority for the enforcement of their orders, except
in cases where the employer contests the findings of the labor employment and enforcement officer and raises
issues supported by documentary proofs which were not considered in the course of inspection.

xxx
 In the case before us, Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and
Employment and it was within his power to issue the compliance order to SMC. In addition, the Court agrees with the Solicitor
General that the petitioner did not deny that it was not paying Muslim holiday pay to its non-Muslim employees. Indeed,
petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. Hence, the issue could be
resolved even without documentary proofs. In any case, there was no indication that Regional Director Macaraya failed to
consider any documentary proof presented by SMC in the course of the inspection.
Anent the allegation that petitioner was not accorded due process, we sustain the Court of Appeals in finding that SMC was
furnished a copy of the inspection order and it was received by and explained to its Personnel Officer. Further, a series of
summary hearings were conducted by DOLE on 19 November 1992, 28 May 1993 and 4 and 5 October 1993. Thus, SMC could
not claim that it was not given an opportunity to defend itself.
Finally, as regards the allegation that the issue on Muslim holiday pay was already resolved in NLRC CA No. M-000915-92
(Napoleon E. Fernan vs. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga),[10] the Court notes that the case
was primarily for illegal dismissal and the claim for benefits was only incidental to the main case. In that case, the NLRC
Cagayan de Oro City declared, in passing:

We also deny the claims for Muslim holiday pay for lack of factual and legal basis. Muslim holidays are legally observed within
the area of jurisdiction of the present Autonomous Region for Muslim Mindanao (ARMM), particularly in the provinces of
Maguindanao, Lanao del Sur, Sulu and Tawi-Tawi. It is only upon Presidential Proclamation that Muslim holidays may be
officially observed outside the Autonomous Region and generally extends to Muslims to enable them the observe said
holidays.[11]

The decision has no consequence to issues before us, and as aptly declared by Undersecretary Espaol, it can never be a
benchmark nor a guideline to the present case x x x.[12]
WHEREFORE, in view of the foregoing, the petition is DISMISSED.

SO ORDERED.
Wages
Facilities vs Supplements
MABEZA vs NLRC; GR No. 118506; April 18,1997

DECISION

KAPUNAN, J.:

This petition seeking the nullification of a resolution of public respondent National Labor Relations Commission dated
April 28, 1994 vividly illustrates why courts should be ever vigilant in the preservation of the constitutionally enshrined rights of
the working class. Without the protection accorded by our laws and the tempering of courts, the natural and historical
inclination of capital to ride roughshod over the rights of labor would run unabated.
The facts of the case at bar, culled from the conflicting versions of petitioner and private respondent, are illustrative.
Petitioner Norma Mabeza contends that around the first week of May, 1991, she and her co-employees at the Hotel
Supreme in Baguio City were asked by the hotel's management to sign an instrument attesting to the latter's compliance with
minimum wage and other labor standard provisions of law.[1] The instrument provides:[2]

JOINT AFFIDAVIT
We, SYLVIA IGANA, HERMINIGILDO AQUINO, EVELYN OGOY, MACARIA JUGUETA, ADELAIDA NONOG,
NORMA MABEZA, JONATHAN PICART and JOSE DIZON, all of legal ages (sic), Filipinos and residents of Baguio
City, under oath, depose and say:

1. That we are employees of Mr. Peter L. Ng of his Hotel Supreme situated at No. 416 Magsaysay Ave., Baguio City;
2. That the said Hotel is separately operated from the Ivy's Grill and Restaurant;
3. That we are all (8) employees in the hotel and assigned in each respective shifts;
4. That we have no complaints against the management of the Hotel Supreme as we are paid accordingly and that we are
treated well.
5. That we are executing this affidavit voluntarily without any force or intimidation and for the purpose of informing the
authorities concerned and to dispute the alleged report of the Labor Inspector of the Department of Labor and Employment
conducted on the said establishment on February 2, 1991.

IN WITNESS WHEREOF, we have hereunto set our hands this 7th day of May, 1991 at Baguio City, Philippines.

(Sgd.) (Sgd.) (Sgd.)

SYLVIA IGAMA HERMINIGILDO AQUINO EVELYN OGOY
(Sgd) (Sgd.) (Sgd.)
MACARIA JUGUETA ADELAIDA NONOG NORMA MABEZA
(Sgd) (Sgd.)
JONATHAN PICART JOSE DIZON

SUBSCRIBED AND SWORN to before me this 7th day of May, 1991, at Baguio City, Philippines.
Asst. City Prosecutor

Petitioner signed the affidavit but refused to go to the City Prosecutor's Office to swear to the veracity and contents of the
affidavit as instructed by management. The affidavit was nevertheless submitted on the same day to the Regional Office of the
Department of Labor and Employment in Baguio City.
 As gleaned from the affidavit, the same was drawn by management for the sole purpose of refuting findings of the Labor
Inspector of DOLE (in an inspection of respondent's establishment on February 2, 1991) apparently adverse to the private
respondent.[3]
After she refused to proceed to the City Prosecutor's Office - on the same day the affidavit was submitted to the Cordillera
Regional Office of DOLE - petitioner avers that she was ordered by the hotel management to turn over the keys to her living
quarters and to remove her belongings from the hotel premises. [4] According to her, respondent strongly chided her for refusing
to proceed to the City Prosecutor's Office to attest to the affidavit. [5] She thereafter reluctantly filed a leave of absence from her
job which was denied by management. When she attempted to return to work on May 10, 1991, the hotel's cashier, Margarita
Choy, informed her that she should not report to work and, instead, continue with her unofficial leave of absence.Consequently,
on May 13, 1991, three days after her attempt to return to work, petitioner filed a complaint for illegal dismissal before the
Arbitration Branch of the National Labor Relations Commission - CAR Baguio City. In addition to her complaint for illegal
dismissal, she alleged underpayment of wages, non-payment of holiday pay, service incentive leave pay, 13th month pay, night
differential and other benefits. The complaint was docketed as NLRC Case No. RAB-CAR-05-0198-91 and assigned to Labor
Arbiter Felipe P. Pati.
Responding to the allegations made in support of petitioner's complaint for illegal dismissal, private respondent Peter Ng
alleged before Labor Arbiter Pati that petitioner "surreptitiously left (her job) without notice to the management"[6] and that she
actually abandoned her work. He maintained that there was no basis for the money claims for underpayment and other benefits
as these were paid in the form of facilities to petitioner and the hotel's other employees. [7] Pointing to the Affidavit of May 7,
1991, the private respondent asserted that his employees actually have no problems with management. In a supplemental answer
submitted eleven (11) months after the original complaint for illegal dismissal was filed, private respondent raised a new ground,
loss of confidence, which was supported by a criminal complaint for Qualified Theft he filed before the prosecutor's office of the
City of Baguio against petitioner on July 4, 1991.[8]
On May 14, 1993, Labor Arbiter Pati rendered a decision dismissing petitioner's complaint on the ground of loss of
confidence. His disquisitions in support of his conclusion read as follows:

It appears from the evidence of respondent that complainant carted away or stole one (1) blanket, 1 piece bedsheet, 1
piece thermos, 2 pieces towel (Exhibits '9', '9-A,' '9-B,' '9-C' and '10' pages 12-14 TSN, December 1, 1992).
In fact, this was the reason why respondent Peter Ng lodged a criminal complaint against complainant for qualified
theft and perjury. The fiscal's office finding a prima facie evidence that complainant committed the crime of qualified
theft issued a resolution for its filing in court but dismissing the charge of perjury (Exhibit '4' for respondent and
Exhibit 'B-7' for complainant). As a consequence, complainant was charged in court for the said crime (Exhibit '5' for
respondent and Exhibit 'B-6' for the complainant).
With these pieces of evidence, complainant committed serious misconduct against her employer which is one of the
just and valid grounds for an employer to terminate an employee (Article 282 of the Labor Code as amended). [9]

On April 28, 1994, respondent NLRC promulgated its assailed Resolution[10] affirming the Labor Arbiter's decision. The
resolution substantially incorporated the findings of the Labor Arbiter.[11] Unsatisfied, petitioner instituted the instant special
civil action for certiorari under Rule 65 of the Rules of Court on the following grounds: [12]

1. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION
IN ITS FAILURE TO CONSIDER THAT THE ALLEGED LOSS OF CONFIDENCE IS A FALSE CAUSE
AND AN AFTERTHOUGHT ON THE PART OF THE RESPONDENT-EMPLOYER TO JUSTIFY, ALBEIT
ILLEGALLY, THE DISMISSAL OF THE COMPLAINANT FROM HER EMPLOYMENT;
2. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION
 IN ADOPTING THE RULING OF THE LABOR ARBITER THAT THERE WAS NO UNDERPAYMENT OF
WAGES AND BENEFITS ON THE BASIS OF EXHIBIT "8" (AN UNDATED SUMMARY OF
COMPUTATION PREPARED BY ALLEGEDLY BY RESPONDENT'S EXTERNAL ACCOUNTANT) WHICH
IS TOTALLY INADMISSIBLE AS AN EVIDENCE TO PROVE PAYMENT OF WAGES AND BENEFITS;
3. WITH ALL DUE RESPECT, THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION
COMMITTED A PATENT AND PALPABLE ERROR AMOUNTING TO GRAVE ABUSE OF DISCRETION
IN FAILING TO CONSIDER THE EVIDENCE ADDUCED BEFORE THE LABOR ARBITER AS
CONSTITUTING UNFAIR LABOR PRACTICE COMMITTED BY THE RESPONDENT.

The Solicitor General, in a Manifestation in lieu of Comment dated August 8, 1995 rejects private respondent's principal
claims and defenses and urges this Court to set aside the public respondent's assailed resolution. [13]
We agree.
It is settled that in termination cases the employer bears the burden of proof to show that the dismissal is for just cause, the
failure of which would mean that the dismissal is not justified and the employee is entitled to reinstatement. [14]
In the case at bar, the private respondent initially claimed that petitioner abandoned her job when she failed to return to
work on May 8, 1991. Additionally, in order to strengthen his contention that there existed sufficient cause for the termination of
petitioner, he belatedly included a complaint for loss of confidence, supporting this with charges that petitioner had stolen a
blanket, a bedsheet and two towels from the hotel.[15] Appended to his last complaint was a suit for qualified theft filed with the
Baguio City prosecutor's office.
From the evidence on record, it is crystal clear that the circumstances upon which private respondent anchored his claim
that petitioner "abandoned" her job were not enough to constitute just cause to sanction the termination of her services under
Article 283 of the Labor Code. For abandonment to arise, there must be concurrence of two things: 1) lack of intention to
work;[16] and 2) the presence of overt acts signifying the employee's intention not to work.[17]
In the instant case, respondent does not dispute the fact that petitioner tried to file a leave of absence when she learned that
the hotel management was displeased with her refusal to attest to the affidavit. The fact that she made this attempt clearly
indicates not an intention to abandon but an intention to return to work after the period of her leave of absence, had it been
granted, shall have expired.
Furthermore, while absence from work for a prolonged period may suggest abandonment in certain instances, mere
absence of one or two days would not be enough to sustain such a claim. The overt act (absence) ought to unerringly point to the
fact that the employee has no intention to return to work,[18] which is patently not the case here. In fact, several days after she
had been advised to take an informal leave, petitioner tried to resume working with the hotel, to no avail. It was only after she
had been repeatedly rebuffed that she filed a case for illegal dismissal. These acts militate against the private respondent's claim
that petitioner abandoned her job. As the Solicitor General in his manifestation observed:

Petitioner's absence on that day should not be construed as abandonment of her job. She did not report because the
cashier told her not to report anymore, and that private respondent Ng did not want to see her in the hotel
premises. But two days later or on the 10th of May, after realizing that she had to clarify her employment status, she
again reported for work. However, she was prevented from working by private respondents.[19]

We now come to the second cause raised by private respondent to support his contention that petitioner was validly
dismissed from her job.
Loss of confidence as a just cause for dismissal was never intended to provide employers with a blank check for terminating
their employees. Such a vague, all-encompassing pretext as loss of confidence, if unqualifiedly given the seal of approval by this
Court, could readily reduce to barren form the words of the constitutional guarantee of security of tenure. Having this in mind,
loss of confidence should ideally apply only to cases involving employees occupying positions of trust and confidence or to those
situations where the employee is routinely charged with the care and custody of the employer's money or property. To the first
class belong managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial
actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine
exercise of their functions, regularly handle significant amounts of money or property. Evidently, an ordinary chambermaid who
has to sign out for linen and other hotel property from the property custodian each day and who has to account for each and
every towel or bedsheet utilized by the hotel's guests at the end of her shift would not fall under any of these two classes of
employees for which loss of confidence, if ably supported by evidence, would normally apply. Illustrating this distinction, this
Court, in Marina Port Services, Inc. vs. NLRC,[20] has stated that:

To be sure, every employee must enjoy some degree of trust and confidence from the employer as that is one reason
why he was employed in the first place. One certainly does not employ a person he distrusts. Indeed, even the lowly
janitor must enjoy that trust and confidence in some measure if only because he is the one who opens the office in the
morning and closes it at night and in this sense is entrusted with the care or protection of the employer's property. The
keys he holds are the symbol of that trust and confidence.
By the same token, the security guard must also be considered as enjoying the trust and confidence of his employer,
whose property he is safeguarding. Like the janitor, he has access to this property. He too, is charged with its care and
protection.
Notably, however, and like the janitor again, he is entrusted only with the physical task of protecting that property. The
employer's trust and confidence in him is limited to that ministerial function. He is not entrusted, in the Labor
Arbiter's words, 'with the duties of safekeeping and safeguarding company policies, management instructions, and
company secrets such as operation devices.' He is not privy to these confidential matters, which are shared only in the
higher echelons of management. It is the persons on such levels who, because they discharge these sensitive duties,
may be considered holding positions of trust and confidence. The security guard does not belong in such category.[21]

More importantly, we have repeatedly held that loss of confidence should not be simulated in order to justify what would
otherwise be, under the provisions of law, an illegal dismissal. "It should not be used as a subterfuge for causes which are illegal,
improper and unjustified. It must be genuine, not a mere afterthought to justify an earlier action taken in bad faith." [22]
In the case at bar, the suspicious delay in private respondent's filing of qualified theft charges against petitioner long after
the latter exposed the hotel's scheme (to avoid its obligations as employer under the Labor Code) by her act of filing illegal
dismissal charges against the private respondent would hardly warrant serious consideration of loss of confidence as a valid
ground for dismissal. Notably, the Solicitor General has himself taken a position opposite the public respondent and has
observed that:

If petitioner had really committed the acts charged against her by private respondents (stealing supplies of respondent
hotel), private respondents should have confronted her before dismissing her on that ground. Private respondents did
not do so. In fact, private respondent Ng did not raise the matter when petitioner went to see him on May 9, 1991, and
handed him her application for leave. It took private respondents 52 days or up to July 4, 1991 before finally deciding
to file a criminal complaint against petitioner, in an obvious attempt to build a case against her.
The manipulations of private respondents should not be countenanced.[23]

Clearly, the efforts to justify petitioner's dismissal - on top of the private respondent's scheme of inducing his employees to
sign an affidavit absolving him from possible violations of the Labor Code - taints with evident bad faith and deliberate malice
petitioner's summary termination from employment.
Having said this, we turn to the important question of whether or not the dismissal by the private respondent of petitioner
constitutes an unfair labor practice.
The answer in this case must inevitably be in the affirmative.
 The pivotal question in any case where unfair labor practice on the part of the employer is alleged is whether or not the
employer has exerted pressure, in the form of restraint, interference or coercion, against his employee's right to institute
concerted action for better terms and conditions of employment. Without doubt, the act of compelling employees to sign an
instrument indicating that the employer observed labor standards provisions of law when he might have not, together with the
act of terminating or coercing those who refuse to cooperate with the employer's scheme constitutes unfair labor practice. The
first act clearly preempts the right of the hotel's workers to seek better terms and conditions of employment through concerted
action.
We agree with the Solicitor General's observation in his manifestation that "[t]his actuation... is analogous to the situation
envisaged in paragraph (f) of Article 248 of the Labor Code" [24] which distinctly makes it an unfair labor practice "to dismiss,
discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony" [25] under
the Labor Code. For in not giving positive testimony in favor of her employer, petitioner had reserved not only her right to
dispute the claim and proffer evidence in support thereof but also to work for better terms and conditions of employment.
For refusing to cooperate with the private respondent's scheme, petitioner was obviously held up as an example to all of the
hotel's employees, that they could only cause trouble to management at great personal inconvenience. Implicit in the act of
petitioner's termination and the subsequent filing of charges against her was the warning that they would not only be deprived of
their means of livelihood, but also possibly, their personal liberty.
This Court does not normally overturn findings and conclusions of quasi-judicial agencies when the same are ably
supported by the evidence on record. However, where such conclusions are based on a misperception of facts or where they
patently fly in the face of reason and logic, we will not hesitate to set aside those conclusions. Going into the issue of petitioner's
money claims, we find one more salient reason in this case to set things right: the labor arbiter's evaluation of the money claims
in this case incredibly ignores existing law and jurisprudence on the matter. Its blatant one-sidedness simply raises the suspicion
that something more than the facts, the law and jurisprudence may have influenced the decision at the level of the Arbiter.
Labor Arbiter Pati accepted hook, line and sinker the private respondent's bare claim that the reason the monetary benefits
received by petitioner between 1981 to 1987 were less than minimum wage was because petitioner did not factor in the meals,
lodging, electric consumption and water she received during the period in her computations. [26] Granting that meals and lodging
were provided and indeed constituted facilities, such facilities could not be deducted without the employer complying first with
certain legal requirements. Without satisfying these requirements, the employer simply cannot deduct the value from the
employee's wages. First, proof must be shown that such facilities are customarily furnished by the trade. Second, the provision of
deductible facilities must be voluntarily accepted in writing by the employee. Finally, facilities must be charged at fair and
reasonable value.[27]
These requirements were not met in the instant case. Private respondent "failed to present any company policy or guideline
to show that the meal and lodging . . . (are) part of the salary;" [28] he failed to provide proof of the employee's written
authorization; and, he failed to show how he arrived at the valuations.[29]
Curiously, in the case at bench, the only valuations relied upon by the labor arbiter in his decision were figures furnished by
the private respondent's own accountant, without corroborative evidence. On the pretext that records prior to the July 16, 1990
earthquake were lost or destroyed, respondent failed to produce payroll records, receipts and other relevant documents, where
he could have, as has been pointed out in the Solicitor General's manifestation, "secured certified copies thereof from the nearest
regional office of the Department of Labor, the SSS or the BIR." [30]
More significantly, the food and lodging, or the electricity and water consumed by the petitioner were not facilities but
supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a facility. The criterion in
making a distinction between the two not so much lies in the kind (food, lodging) but the purpose.[31] Considering, therefore, that
hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability
is a necessary matter in the operations of a small hotel, such as the private respondent's hotel.
 It is therefore evident that petitioner is entitled to the payment of the deficiency in her wages equivalent to the full wage
applicable from May 13, 1988 up to the date of her illegal dismissal.
Additionally, petitioner is entitled to payment of service incentive leave pay, emergency cost of living allowance, night
differential pay, and 13th month pay for the periods alleged by the petitioner as the private respondent has never been able to
adduce proof that petitioner was paid the aforestated benefits.
However, the claims covering the period of October 1987 up to the time of filing the case on May 13, 1988 are barred by
prescription as P.D. 442 (as amended) and its implementing rules limit all money claims arising out of employer-employee
relationship to three (3) years from the time the cause of action accrues.[32]
We depart from the settled rule that an employee who is unjustly dismissed from work normally should be reinstated
without loss of seniority rights and other privileges. Owing to the strained relations between petitioner and private respondent,
allowing the former to return to her job would only subject her to possible harassment and future embarrassment. In the instant
case, separation pay equivalent to one month's salary for every year of continuous service with the private respondent would be
proper, starting with her job at the Belfront Hotel.
In addition to separation pay, backwages are in order. Pursuant to R.A. 6715 and our decision in Osmalik Bustamante, et
al. vs. National Labor Relations Commission,[33] petitioner is entitled to full backwages from the time of her illegal dismissal up
to the date of promulgation of this decision without qualification or deduction.
Finally, in dismissal cases, the law requires that the employer must furnish the employee sought to be terminated from
employment with two written notices before the same may be legally effected. The first is a written notice containing a statement
of the cause(s) for dismissal; the second is a notice informing the employee of the employer's decision to terminate him stating
the basis of the dismissal. During the process leading to the second notice, the employer must give the employee ample
opportunity to be heard and defend himself, with the assistance of counsel if he so desires.
Given the seriousness of the second cause (qualified theft) of the petitioner's dismissal, it is noteworthy that the private
respondent never even bothered to inform petitioner of the charges against her. Neither was petitioner given the opportunity to
explain the loss of the articles. It was only almost two months after petitioner had filed a complaint for illegal dismissal, as an
afterthought, that the loss was reported to the police and added as a supplemental answer to petitioner's complaint. Clearly, the
dismissal of petitioner without the benefit of notice and hearing prior to her termination violated her constitutional right to due
process. Under the circumstances, an award of One Thousand Pesos (P1,000.00) on top of payment of the deficiency in wages
and benefits for the period aforestated would be proper.
WHEREFORE, premises considered, the RESOLUTION of the National Labor Relations Commission dated April 24,
1994 is REVERSED and SET ASIDE, with costs. For clarity, the economic benefits due the petitioner are hereby summarized as
follows:

1) Deficiency wages and the applicable ECOLA from May 13, 1988 up to the date of petitioner's illegal dismissal;
2) Service incentive leave pay; night differential pay and 13th month pay for the same period;
3) Separation pay equal to one month's salary for every year of petitioner's continuous service with the private
respondent starting with her job at the Belfront Hotel;
4) Full backwages, without qualification or deduction, from the date of petitioner's illegal dismissal up to the date of
promulgation of this decision pursuant to our ruling in Bustamante vs. NLRC.[34]
5) P1.000.00.

SO ORDERED.
Principles (Article 97, 102, 99, 100, 127, 101, 103-105, 112-119)
NORTH DAVAO MINING CORPORATION vs NLRC; GR. No. 112546; March 13, 1996

DECISION

PANGANIBAN, J.:

Is a company which is forced by huge business losses to close its business, legally required to pay separation benefits to its
employees at the time of its closure in an amount equivalent to the separation pay paid to those who were separated when the
company was still a going concern? This is the main question brought before this Court in this petition for certiorari under Rule
65 of the Revised Rules of Court, which seeks to reverse and set aside the Resolutions dated July 29, 1993 [1] and September 27,
1993[2] of the National Labor Relations Commision[3] (NLRC) in NLRC-CA No. M-001395-93.
The Resolution dated July 29, 1993 affirmed in tow the decision of the Labor Arbiter in RAB-1 1-08-00672-92 and RAB- 11-
08-00713-92 ordering petitioners to pay the complainants therein certain monetary claims.
The Resolution dated September 27, 1993 denied the motion for reconsideration of the said July 29, 1993 Resolution.

The Facts

Petitioner North Davao Mining Corporation (North Davao) was incorporated in 1974 as a 100% privately-owned
company. Later, the Philippine National Bank (PNB) became part owner thereof as a result of a conversion into equity of a
portion of loans obtained by North Davao from said bank. On June 30, 1986, PNB transferred all its loans to and equity in North
Davao in favor of the national government which, by virtue of Proclamation No. 50 dated December 8, 1986, later turned them
over to petitioner Asset Privatization Trust (APT). As of December 31, 1990 the national government held 81.8% of the common
stock and 100% of the preferred stock of said company.[4]

Respondent Wilfredo Guillema is one among several employees of North Davao who were separated by reason of the
companys closure on May 31, 1992, and who were the complainants in the cases before the respondent labor arbiter.

On May 31, 1992, petitioner North Davao completely ceased operations due to serious business reverses. From 1988 until
its closure in 1992, North Davao suffered net losses averaging three billion pesos (P3,000,000,000.00) per year, for each of the
five years prior to its closure. All told, as of December 31, 1991, or five months prior to its closure, its total liabilities had exceeded
its assets by 20.392 billion pesos, as shown by its financial statements audited by the Commission on Audit. When it ceased
operations, its remaining employees were separated and given the equivalent of 12.5 days pay for every year of service, computed
on their basic monthly pay, in addition to the commutation to cash of their unused vacation and sick leaves.However, it appears
that, during the life of the petitioner corporation, from the beginning of its operations in 1981 until its closure in 1992, it had
been giving separation pay equivalent to thirty (30) days pay for every year of service. Moreover, inasmuch as the region where
North Davao operated was plagued by insurgency and other peace and order problems, the employees had to collect their
salaries at a bank in Tagum, Davao del Norte, some 58 kilometers from their workplace and about 2 hours travel time by public
transportation; this arrangement lasted from 1981 up to 1990.

Subsequently, a complaint was filed with respondent labor arbiter by respondent Wilfredo Guillema and 271 other
seperated employees for: (1) additional separation pay of 17.5 days for every year of service; (2) back wages equivalent to two
days a month; (3) transportation allowance; (4) hazard pay; (5) housing allowance; (6) food allowance; (7) post-employment
medical clearance; and (8) future medical allowance, all of which amounted to P58,022,878.31 as computed by private
respondent.[5]
On May 6, 1993, respondent Labor Arbiter rendered a decision ordering petitioner North Davao to pay the complainants
the following:

(a) Additional separation pay of 17.5 days for every year of service;
(b) Backwages equivalent to two (2) days a month times the number of years of service but not to exceed three (3) years;
(c) Transportation allowance at P80 a month times the number of years of service but not to exceed three (3) years.

The benefits awarded by respondent Labor Arbiter amounted to P10,240,517.75. Attorneys fees equivalent to ten percent
(10%) thereof were also granted.[6]
On appeal, respondent NLRC affirmed the decision in toto. Petitioner North Davaos motion for reconsideration was
likewise denied. Hence, this petition.

The Parties Submissions and the Issues

In affirming the Labor Arbiters decision, respondent NLRC ruled that since (North Davao) has been paying its employees
separation pay equivalent to thirty (30) days pay for every year of service, knowing fully well that the law provides for a lesser
separation pay, then such company policy has ripened into an obligation, and therefore, depriving now the herein private
respondent and others similarly situated of the same benefits would be discriminatory. [7] Quoting from Businessday Information
Systems and Services. Inc. (BISSI) vs. NLRC.[8] it said that petitioners may not pay separation benefits unequally for such
discrimination breeds resentment and ill-will among those who have been treated less generously than others. It also
cited Abella vs. NLRC,[9] as authority for saying that Art. 283 of the Labor Code protects workers in case of the closure of the
establishment.
To justify the award of two days a month in backwages and P80 per month of transportation allowance, respondent
Commission ruled:

As to the appellants claim that complainants-appeallees time spent in collecting their wages at Tagum, Davao is not compensable
allegedly because it was on official time can not be given credence. No iota of evidence has been presented to back up said
contention. The same is true with appellants assertion that the claim for transportation expenses is without basis since they were
incurred by the complainants. Appellants should have submitted the payrolls to prove that complainants-appellees were not the
ones who personally collected their wages and/or the bus/jeep trip tickets or vouchers to show that the complainants-appellees
were provided with free transportation as claimed.

Petitioner, through the Government Corporate Counsel, raised the following grounds for the allowance of the petition:

1. The NLRC acted with grave abuse of discretion in affirming without legal basis the award of additional separation pay to
private respondents who were separated due to serious business losses on the part of petitioner.
2. The NLRC acted with grave abuse of discretion in affirming without sufficient factual basis the award of backwages and
transportation expenses to private respondents.
3. There is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of the law.

and the following issues:

1. Whether or not an employer whose business operations ceased due to serious business losses or financial reverses is obliged to
pay separation pay to its employees separated by reason of such closure.
2. Whether or not time spent in collecting wages in a place other than the place of employment is compensable notwithstanding
that the same is done during official time.
3. Whether or not private respondents are entitled to transportation expenses in the absence of evidence that these expenses
were incurred.

The First Issue: Separation Pay

To resolve this issue, it is necessary to revisit the provision of law adverted to by the parties in their submissions, namely
Art. 283 of the Labor Code, which reads as follows:

Art. 283. Closure of establishment and reduction of personnel. - The employer may also terminate the employment of any
employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation
of operation of the establishment or under-taking unless the closing is for the purpose of circumventing the provisions of this
Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every
year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations
of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent
to one (1) month pay or at least one-half () month pay for every year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year. (italics supplied)

The underscored portion of Art. 283 governs the grant of seperation benefits in case of closures or cessation of operation of
business establishments NOT due to serious business losses or financial reverses x x x. Where, however, the closure was due to
business losses - as in the instant case, in which the aggregate losses amounted to over P20 billion - the Labor Code
does not impose any obligation upon the employer to pay separation benefits, for obvious reasons. There is no need to belabor
this point. Even the public respondents, in their Comment[10] filed by the Solicitor General, impliedly concede this point.

However, respondents tenaciously insist on the award of separation pay, anchoring their claim solely on petitioner North
Davaos long-standing policy of giving separation pay benefits equivalent to 30- days pay, which policy had been in force in the
years prior to its closure. Respondents contend that, by denying the same separation benefits to private respondent and the
others similarly situated, petitioners discriminated against them. They rely on this Courts ruling in Businessday Information
Systems and Services, Inc. (BISSI) vs. NLRC, (supra). In said case, petitioner BISSI, after experiencing financial reverses,
decided as a retrenchment measure to lay-off some employees on May 16, 1988 and gave them separation pay equivalent to one-
half () month pay for every year of service. BISSI retained some employees in an attempt to rehabilitate its business as a trading
company. However, barely two and a half months later, these remaining employees were likewise discharged because the
company decided to cease business operations altogether. Unlike the earlier terminated employees, the second batch received
separation pay equivalent to a full months salary for every year of service, plus a mid-year bonus. This Court ruled that there was
impermissible discrimination against the private respondents in the payment of their separation benefits. The law requires an
employer to extend equal treatment to its employees. It may not, in the guise of exercising management prerogatives, grant
greater benefits to some and less to others. x x x
 In resolving the present case, it bears keeping in mind at the outset that the factual circumstances of BISSI are quite
different from the current case. The Court noted that BISSI continued to suffer losses even after the retrenchment of the first
batch of employees; clearly, business did not improve despite such drastic measure. That notwithstanding, when BISSI finally
shut down, it could well afford to (and actually did) pay off its remaining employees with MORE separation benefits as compared
with those earlier laid off; obviously, then, there was no reason for BISSI to skimp on separation pay for the first batch of
discharged employees. That it was able to pay one-month separation benefit for employees at the time of closure of its business
meant that it must have been also in a position to pay the same amount to those who were separated prior to closure. That it did
not do so was a wrongful exercise of management prerogatives. That is why the Court correctly faulted it with impermissible
discrimination. Clearly, it exercised its management prerogatives contrary to general principles of fair play and justice.

In the instant case however, the companys practice of giving one months pay for every year of service could no longer be
continued precisely because the company could not afford it anymore. It was forced to close down on account of accumulated
losses of over P20 billion. This could not be said of BISSI. In the case of North Davao, it gave 30-days separation pay to its
employees when it was still a going concern even if it was already losing heavily. As a going concern, its cash flow could still have
sustained the payment of such separation benefits. But when a business enterprise completely ceases operations, i.e., upon its
death as a going business concern, its vital lifeblood -its cashflow - literally dries up. Therefore, the fact that less separation
benefits were granted when the company finally met its business death cannot be characterized as discrimination. Such action
was dictated not by a discriminatory management option but by its complete inability to continue its business life due to
accumulated losses. Indeed, one cannot squeeze blood out of a dry stone. Nor water out of parched land.

As already stated, Art. 283 of the Labor Code does not obligate an employer to pay separation benefits when the closure is
due to losses. In the case before us, the basis for the claim of the additional separation benefit of 17.5 days is alleged
discrimination, i.e., unequal treatment of employees, which is proscribed as an unfair labor practice by Art. 248 (e) of said
Code. Under the facts and circumstances of the present case, the grant of a lesser amount of separation pay to private respondent
was done, not by reason of discrimination, but rather, out of sheer financial bankruptcy - a fact that is not controlled by
management prerogatives. Stated differently, the total cessation of operation due to mind-boggling losses was a supervening fact
that prevented the company from continuing to grant the more generous amount of separation pay. The fact that North Davao at
the point of its forced closure voluntarily paid any separation benefits at all - although not required by law - and 12.5-days worth
at that, should have elicited admiration instead of condemnation. But to require it to continue being generous when it is no
longer in a position to do so would certainly be unduly oppressive, unfair and most revolting to the conscience. As this Court held
in Manila Trading & Supply Co. vs. Zulueta,[11] and reiterated in San Miguel Corporation vs. NLRC[12] and later, in Allied
Banking Corporation vs. Castro,[13] (t)he law, in protecting the rights of the laborer, authorizes neither oppression nor self-
destruction of the employer.

At this juncture, we note that the Solicitor General in his Comment challenges the petitioners assertion that North Davao,
having closed down, no longer has the means to pay for the benefits. The Solicitor General stresses that North Davao was among
the assets transferred by PNB to the national government, and that by virtue of Proclamation No. 50 dated December 8, 1986,
the APT was constituted trustee of this government asset. He then concludes that (i)t would, therefore, be incongruous to declare
that the National Government, which should always be presumed to be solvent, could not pay now private respondents money
claims. Such argumentation is completely misplaced. Even if the national government owned or controlled 81.8% of the common
stock and 100% of the preferred stock of North Davao, it remains only a stockholder thereof, and under existing laws and
prevailing jurisprudence, a stockholder as a rule is not directly, individually and/or personally liable for the indebtedness of the
corporation. The obligation of North Davao cannot be considered the obligation of the national government, hence, whether the
latter be solvent or not is not material to the instant case. The respondents have not shown that this case constitutes one of the
instances where the corporate veil may be pierced.[14] From another angle, the national government is not the employer of private
respondent and his co-complainants, so there is no reason to expect any kind of bailout by the national government under
existing law and jurisprudence.

The Second and Third Issues:

Back Wages and Transportation Allowance

Anent the award of back wages and transportation allowance, the issues raised in connection therewith are factual, the
determination of which is best left to the respondent NLRC. It is well settled that this Court is bound by the findings of fact of the
NLRC, so long as said findings are supported by substantial evidence.[15]
As the Solicitor General pointed out in his comment:

It is undisputed that because of security reasons, from the time of its operations, petitioner NDMC maintained its policy of
paying its workers at a bank in Tagum, Davao del Norte, which usually took the workers about two and a half (2 1/2) hours of
travel from the place of work and such travel time is not official.
Records also show that on February 12,1992, when an inspection was conducted by the Department of Labor and Employment at
the premises of petitioner NDMC at Amacan, Maco, Davao del Norte, it was found out that petitioners had violated labor
standards law, one of which is the place of payment of wages (p.109, Vol. 1, Record).

Section 4, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code provides that:

Section 4. Place of payment. - (a) As a general rule, the place of payment shall be at or near the place of undertaking. Payment in
a place other than the workplace shall be permissible only under the following circumstances:
(1) When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or
by reason of actual or impending emergencies caused by fire, flood, epidemic or other calamity rendering payment thereat
impossible;
(2) When the employer provides free transportation to the employees back and forth; and
(3) Under any analogous circumstances; provided that the time spent by the employees in collecting their wages shall be
considered as compensable hours worked.
(b) xxx xxx xxx.
(Italics supplied)

Accordingly, in his Order dated April 14, 1992 (p. 109, Vol. 1, Record), the Regional Director, Regional Office No. XI,
Department of Labor and Employment, Davao City, ordered petitioner NDMC, among others, as follows:

WHEREFORE, x x x. Respondent is further ordered to pay its workers salaries at the plantsite at Amacan, New Leyte, Maco,
Davao del Norte or whenever not possible, through the bank in Tagum, Davao del Norte as already been practiced subject,
however to the provisions of Section 4 of Rule VIII, Book III of the rules implementing the Labor Code as amended.

Thus, public respondent Labor Arbiter Antonio M. Villanueva correctly held that:

From the evidence on record, we find that the hours spent by complainants in collecting salaries at a bank in Tagum, Davao del
Norte shall be considered compensable hours worked. Considering further the distance between Amacan, Maco to Tagum which
is 2 hours by travel and the risks in commuting all the time in collecting complainants salaries, would justify the granting of
backwages equivalent to two (2) days in a month as prayed for.
Corollary to the above findings, and for equitable reasons, we likewise hold respondents liable for the transportation expenses
incurred by complainants at P40.00 round trip fare during pay days.
(p. 10, Decision; p. 207, Vol. 1, Record)

On the contrary, it will be petitioners burden or duty to present evidence of compliance of the law on labor standards,
rather than for private respondents to prove that they were not paid/provided by petitioners of their backwages and
transportation expenses.
Other than the bare denials of petitioners, the above findings stands uncontradicted. Indeed we are not at liberty to set
aside findings of facts of the NLRC, absent any capriciousness, arbitrariness, or abuse or complete lack of basis. In Maya Farms
Employees Organizations vs. NLRC,[16] we held:

This Court has consistently ruled that findings of fact of administrative agencies and quasi-judicial bodies which have acquired
expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality and
are binding upon this Court unless there is a showing of grave abuse of discretion, or where it is clearly shown that they were
arrived at arbitrarily or in disregard of the evidence on record.

WHEREFORE, judgment is hereby rendered MODIFYING the assailed Resolution by SETTING ASIDE and deleting the
award for additional separation pay of 17.5 days for every year of service, and AFFIRMING it in all other aspects. No costs.

SO ORDERED.
FIVE J TAXI vs NLRC, GR No. 111474, Aug 22, 1994

R E SO L U T I O N

REGALADO, J.:

Petitioners Five J Taxi and/or Juan S. Armamento filed this special civil action for certiorari to annul the decision 1 of
respondent National Labor Relations Commission (NLRC) ordering petitioners to pay private respondents Domingo Maldigan
and Gilberto Sabsalon their accumulated deposits and car wash payments, plus interest thereon at the legal rate from the date of
promulgation of judgment to the date of actual payment, and 10% of the total amount as and for attorney's fees.

We have given due course to this petition for, while to the cynical the de minimis amounts involved should not impose upon the
valuable time of this Court, we find therein a need to clarify some issues the resolution of which are important to small wage
earners such as taxicab drivers. As we have heretofore repeatedly demonstrated, this Court does not exist only for the rich or the
powerful, with their reputed monumental cases of national impact. It is also the Court of the poor or the underprivileged, with
the actual quotidian problems that beset their individual lives.

Private respondents Domingo Maldigan and Gilberto Sabsalon were hired by the petitioners as taxi drivers 2 and, as such, they
worked for 4 days weekly on a 24-hour shifting schedule. Aside from the daily "boundary" of P700.00 for air-conditioned taxi or
P450.00 for non-air-conditioned taxi, they were also required to pay P20.00 for car washing, and to further make a P15.00
deposit to answer for any deficiency in their "boundary," for every actual working day.

In less than 4 months after Maldigan was hired as an extra driver by the petitioners, he already failed to report for work for
unknown reasons. Later, petitioners learned that he was working for "Mine of Gold" Taxi Company. With respect to Sabsalon,
while driving a taxicab of petitioners on September 6, 1983, he was held up by his armed passenger who took all his money and
thereafter stabbed him. He was hospitalized and after his discharge, he went to his home province to recuperate.

In January, 1987, Sabsalon was re-admitted by petitioners as a taxi driver under the same terms and conditions as when he was
first employed, but his working schedule was made on an "alternative basis," that is, he drove only every other day. However, on
several occasions, he failed to report for work during his schedule.

On September 22, 1991, Sabsalon failed to remit his "boundary" of P700.00 for the previous day. Also, he abandoned his taxicab
in Makati without fuel refill worth P300.00. Despite repeated requests of petitioners for him to report for work, he adamantly
refused. Afterwards it was revealed that he was driving a taxi for "Bulaklak Company."

Sometime in 1989, Maldigan requested petitioners for the reimbursement of his daily cash deposits for 2 years, but herein
petitioners told him that not a single centavo was left of his deposits as these were not even enough to cover the amount spent for
the repairs of the taxi he was driving. This was allegedly the practice adopted by petitioners to recoup the expenses incurred in
the repair of their taxicab units. When Maldigan insisted on the refund of his deposit, petitioners terminated his services.
Sabsalon, on his part, claimed that his termination from employment was effected when he refused to pay for the washing of his
taxi seat covers.

On November 27, 1991, private respondents filed a complaint with the Manila Arbitration Office of the National Labor Relations
Commission charging petitioners with illegal dismissal and illegal deductions. That complaint was dismissed, the labor arbiter
holding that it took private respondents two years to file the same and such unreasonable delay was not consistent with the
natural reaction of a person who claimed to be unjustly treated, hence the filing of the case could be interpreted as a mere
afterthought.

Respondent NLRC concurred in said findings, with the observation that private respondents failed to controvert the evidence
showing that Maldigan was employed by "Mine of Gold" Taxi Company from February 10, 1987 to December 10, 1990; that
Sabsalon abandoned his taxicab on September 1, 1990; and that they voluntarily left their jobs for similar employment with other
taxi operators. It, accordingly, affirmed the ruling of the labor arbiter that private respondents' services were not illegally
terminated. It, however, modified the decision of the labor arbiter by ordering petitioners to pay private respondents the awards
stated at the beginning of this resolution.

Petitioners' motion for reconsideration having been denied by the NLRC, this petition is now before us imputing grave abuse of
discretion on the part of said public respondent.

This Court has repeatedly declared that the factual findings of quasi-judicial agencies like the NLRC, which have acquired
expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect but, at times, finality if
such findings are supported by substantial evidence. 3 Where, however, such conclusions are not supported by the evidence, they
must be struck down for being whimsical and capricious and, therefore, arrived at with grave abuse of discretion. 4

Respondent NLRC held that the P15.00 daily deposits made by respondents to defray any shortage in their "boundary" is
covered by the general prohibition in Article 114 of the Labor Code against requiring employees to make deposits, and that there
is no showing that the Secretary of Labor has recognized the same as a "practice" in the taxi industry. Consequently, the deposits
made were illegal and the respondents must be refunded therefor.

Article 114 of the Labor Code provides as follows:

Art. 114. Deposits for loss or damage. — No employer shall require his worker to make deposits from which
deductions shall be made for the reimbursement of loss of or damage to tools, materials, or equipment supplied
by the employer, except when the employer is engaged in such trades, occupations or business where the
practice of making deposits is a recognized one, or is necessary or desirable as determined by the Secretary of
Labor in appropriate rules and regulations.

It can be deduced therefrom that the said article provides the rule on deposits for loss or damage to tools, materials or
equipments supplied by the employer. Clearly, the same does not apply to or permit deposits to defray any deficiency which the
taxi driver may incur in the remittance of his "boundary." Also, when private respondents stopped working for petitioners, the
alleged purpose for which petitioners required such unauthorized deposits no longer existed. In other case, any balance due to
private respondents after proper accounting must be returned to them with legal interest.

However, the unrebutted evidence with regard to the claim of Sabsalon is as follows:

YEAR DEPOSITS SHORTAGES VALES

1987 P 1,403.00 P 567.00 P 1,000.00

1988 720.00 760.00 200.00

1989 686.00 130.00 1,500.00

 1990 605.00 570.00

1991 165.00 2,300.00

———— ———— ————

P 3,579.00 P 4,327.00 P 2,700.00

The foregoing accounting shows that from 1987-1991, Sabsalon was able to withdraw his deposits through vales or he incurred
shortages, such that he is even indebted to petitioners in the amount of P3,448.00. With respect to Maldigan's deposits, nothing
was mentioned questioning the same even in the present petition. We accordingly agree with the recommendation of the
Solicitor General that since the evidence shows that he had not withdrawn the same, he should be reimbursed the amount of his
accumulated cash deposits. 5

On the matter of the car wash payments, the labor arbiter had this to say in his decision: "Anent the issue of illegal deductions,
there is no dispute that as a matter of practice in the taxi industry, after a tour of duty, it is incumbent upon the driver to restore
the unit he has driven to the same clean condition when he took it out, and as claimed by the respondents (petitioners in the
present case), complainant(s) (private respondents herein) were made to shoulder the expenses for washing, the amount doled
out was paid directly to the person who washed the unit, thus we find nothing illegal in this practice, much more (sic) to consider
the amount paid by the driver as illegal deduction in the context of the law." 6 (Words in parentheses added.)

Consequently, private respondents are not entitled to the refund of the P20.00 car wash payments they made. It will be noted
that there was nothing to prevent private respondents from cleaning the taxi units themselves, if they wanted to save their
P20.00. Also, as the Solicitor General correctly noted, car washing after a tour of duty is a practice in the taxi industry, and is, in
fact, dictated by fair play.

On the last issue of attorney's fees or service fees for private respondents' authorized representative, Article 222 of the Labor
Code, as amended by Section 3 of Presidential Decree No. 1691, states that non-lawyers may appear before the NLRC or any
labor arbiter only (1) if they represent themselves, or (2) if they represent their organization or the members thereof. While it
may be true that Guillermo H. Pulia was the authorized representative of private respondents, he was a non-lawyer who did not
fall in either of the foregoing categories. Hence, by clear mandate of the law, he is not entitled to attorney's fees.

Furthermore, the statutory rule that an attorney shall be entitled to have and recover from his client a reasonable compensation
for his services 7 necessarily imports the existence of an attorney-client relationship as a condition for the recovery of attorney's
fees, and such relationship cannot exist unless the client's representative is a lawyer. 8

WHEREFORE, the questioned judgment of respondent National Labor Relations Commission is hereby MODIFIED by deleting
the awards for reimbursement of car wash expenses and attorney's fees and directing said public respondent to order and effect
the computation and payment by petitioners of the refund for private respondent Domingo Maldigan's deposits, plus legal
interest thereon from the date of finality of this resolution up to the date of actual payment thereof.

SO ORDERED.